In it’s 2009-2010 regulatory plan, the DOL stated that it intends to amend the definition of “fiduciary” related to the rendering of investment advice. This would cover investment advice to plans and to participants and would broaden the category of people who are classified as fiduciaries.

Consultants, broker-dealers, and RIAs should pay close attention to the development of this regulatory amendment. The expanded definition could result in some people being classified as fiduciaries where they are not now acting as fiduciaries, or others finding that more of their services are subject to the fiduciary standard of care, or both of those. As a result, when the proposed regulatory change is issued, consultants, broker-dealers, and RIA firms should carefully review the proposal to determine whether the scope is too broad and, if so, to educate the Department about those issues.

In relevant part, the Department of Labor says in it’s Regulatory Plan:

Title: Definition of “Fiduciary”--Investment Advice

Abstract: This rulemaking would amend the regulatory definition of the term “fiduciary” set forth at 29 CFR 2510.3-21(c) to more broadly define as employee benefit plan fiduciaries persons who render investment advice to plans for a fee within the meaning of section 3(21) of ERISA. The amendment would take into account current practices of investment advisers and the expectations of plan officials and participants who receive investment advice.

Statement of Need: This rulemaking is needed to bring the definition of “fiduciary” into line with investment advice practices and to recast the current regulation to better reflect relationships between investment advisers and their employee benefit plan clients. The current regulation may inappropriately limit the types of investment advice relationships that should give rise to fiduciary duties on the part of the investment adviser.
Source: The Adviser Report