Adviser Certification Programs Enhanced with DoL Guidance

February 7, 2007 (PLANSPONSOR.com) - A Boston-based financial services research firm has updated two plan adviser certification programs to take into account the Department of Labor's (DoL) latest regulatory pronouncement on offering investment advice to plans.

A news release said that certification requirements now incorporate the DoL guidance (See DoL Sets Out Fiduciary Adviser Selection/Monitoring Guidelines), and the evaluation process has also been expanded. Already-certified advisers will submit to the revised process at their next anniversary, while those applying for the first time will immediately use the revised process, according to the announcement.

A new DoL requirement for Fiduciary Advisers incorporated into the program is that an adviser’s firm as well as the adviser must be certified as a Fiduciary Adviser.

“The DoL’s most recent bulletin has effectively mandated all advisers who currently deliver advice to plans must be run through an objective due diligence program, which is what our programs were designed to do,” said Lou Harvey, President of DALBAR, in the news release. .

According to the news release, the following steps constitute the revised process for the 401(k) Adviser Certification and the Fiduciary Adviser Network (FAN) programs:

  • declarations for 401(k) certification are expanded to include the fee offset requirement and the acknowledgement that the adviser is acting as a fiduciary of the plan.
  • disclosures now include any potential self-dealing or conflicts of interest and disclosure of the investment theory that is used as the basis for rendering advice.
  • the certification test of the FAN training is expanded to test knowledge of new DoL requirements; and renewal will now include, in addition to background and quality check, a review of actual utilization of the adviser’s services.

DALBAR, Inc. and PLANSPONSOR, a program co-sponsor, announced the adviser training in September that is designed to pre-qualify financial professionals to act as fiduciary advisers and to provide the due diligence and documentation required by the Pension Protection Act of 2006. (See   DALBAR and PLANSPONSOR to create Fiduciary Adviser Network (FAN))

More information is  here .

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