In response to multiple questions about the “investment advice” exemption (Exemption) of the Pension Protection Act of 2006 (PPA), the Department of Labor (Department) has just released Field Assistance Bulletin 2007-01 (FAB) (Feb. 2, 2007), addressing issues of significant importance to financial institutions servicing employee benefit plans and individual retirement accounts (IRAs). The FAB resolves some of the uncertainties created by the PPA and creates a new option for service providers that wish to provide investment advice without fee offsets or reliance on computer models.
The attached memorandum outlines-
- Pre-PPA common industry approaches to structuring investment advice programs, based on the Department’s advisory opinions and other guidance.
- The scope, requirements and the issues created by the Exemption.
- Issues resolved by the FAB.
- Opportunities created by the FAB.
- Unresolved issues.
