Rollover or distribution advice

The Stapley letter

Questions raised

• Does it matter whether the advisor is a fiduciary with discretionary management authority, plan administrator authority or merely provides fiduciary advice that must be implemented by a third party?  For example, arguably, a fiduciary that has the power to cause a distribution that benefits itself should be more problematic than a fiduciary that simply recommends (but cannot cause or control) such a transaction.  Neither question is directly addressed by existing guidance.
• Instead, is it possible and practicable to “firewall” fiduciary status by accepting fiduciary responsibility for advice to the plan or plan sponsor on an “ongoing” basis, but specifically disclaiming fiduciary responsibility for distributions?
• Is it preferable in the absence of clear guidance to avoid fiduciary responsibility for rollover recommendations irrespective of whether the advisor provides any fiduciary services to the plan?

• Reliance on the BIC Exemption, pursuant to transitional relief issued by DOL, for at least so long as such relief remains in effect;
• Attempting to level fees or otherwise avoid disparate fees for providing such recommendations;
• Requesting a new exemption; or
• Attempting to outsource distribution guidance to an independent third-party.