Assuming you have completed this analysis and determined that you are a covered service provider, what now? For some providers, this may be easy. For example, many TPAs utilize service agreements that already describe most, if not all, of the compensation they will receive for the services described. For these providers, they may have minimal additional disclosure requirements once the regulations become effective. 

Of course, those TPAs who receive revenue sharing or other forms of indirect compensation may need to provide additional disclosures, unless they are already disclosing those amounts to clients. Either way, it is important to take the time to review your agreements and other client communications, preferably with someone who is well versed in the disclosure requirements, to determine whether additional disclosure may be appropriate.

If your existing agreements are not adequate for this purpose (and I note that not all  providers have used client agreements), it is time to create your disclosures. For advisors who are affiliated with a firm, it is important to learn your firm's position on fee disclosure and what resources they have available to assist you in your own disclosure requirements, if any.

For those who are unaffiliated, there are many resources available on the web that can help you to learn about 408(b)(2) and determine what, if anything, you need to disclose to your clients. Also, this is a good time to reach out to the partners you work with, such as recordkeepers and TPAs, to determine what resources they may have available to support your disclosure obligations. Again, it's ultimately your responsibility to disclose, so make sure you retain counsel if you have any doubts.

Once you determine your disclosure obligations and you are ready to prepare your disclosures, it is a great time to reach out to your clients and educate them on 408(b)(2). The more information your clients have about the disclosure requirements and your efforts to provide them with fully transparent disclosures, the less likely it is that you will run into problems. First, this is a great opportunity to show your clients the value of your services, which is important at a time when there is increased scrutiny on fees. 

Further, and as we have previously discussed, clients have an incentive to report non-compliant service providers to the U.S. Department of Labor. One way to potentially avoid such complaints is to get out in front of your clients as early as possible with educational materials and, of course, your disclosures. The more they understand about the regulations and your  disclosures, the greater transparency you will be providing to your clients.

For those providers with a large client base, you may also want to consider whether you can deliver your disclosures electronically. As you probably know, the DOL regulations permit electronic delivery of required notices, but only if certain requirements have been met. 

Without getting into too much detail, the main requirement is that the recipient of the information must clearly consent to receive such disclosures electronically.  They also must show the ability to access the medium by which the disclosures will be provided.

For example, if you intend to e-mail your disclosures, now is a good time to both confirm that your clients are willing to receive their disclosures electronically as well as to ensure that you have the correct e-mail address for each of them. Again, if you are not already familiar with the delivery requirements, make sure you consult with a trusted advisor who can help you. The consequences of failure are too severe to risk. 

As you move towards the effective dates of the disclosure regulations, keep in mind that sponsors and participants are, to varying degrees, also preparing. As the deadlines grow closer, sponsors and participants will become more familiar with the requirements and will start to ask questions about what they will receive. 

The service providers who get out in front of these regulations, who embrace full fee transparency and use it to both show value and connect with clients, can thrive.  Those service providers who do the bare minimum may find themselves on the outside looking in.