Loss of exemption may force advisers to tweak business models
Employee Benefit Adviser, May, 2007 by Elayne Robertson Demby
Retirement plan brokers may have to restructure their businesses in light of a Federal Court of Appeals decision. On March 30 the court struck down an SEC rule which exempted broker-dealers from Investment Advisers Act of 1940 requirements. The so-called "Merrill Rule" allowed brokers to provide investment advice for a fee without registering as investment advisers or assuming fiduciary status. If the ruling stands, it would be prudent for brokers who have been relying on the Merrill rule to reconsider their business model, says Donald Trone, founder and chief executive officer of Fiduciary 360 in Sewickley, Pa.
The ruling, Financial Planning Association v. Securities and Exchange Commission was a victory for the FPA. The ruling should bring some clarity to the financial...
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