Morningstar, American Retirement Association partner on fiduciary program

The collaboration focuses on the compliance confusion among advisers and broker-dealers caused by the DOL's fiduciary rule

Jul 12, 2016 @ 1:33 pm

By Greg Iacurci

Morningstar Inc. and the American Retirement Association today announced a partnership on an upcoming fiduciary training program for advisers, to help address compliance concerns raised by a new Labor Department rule and any future regulatory projects around a fiduciary standard of care.

“This is for wealth managers, the 250,000 advisers who are now subject to a fiduciary standard,” according to Brian Graff, chief executive of the American Retirement Association, an organization encompassing four different retirement-industry trade groups.

The partnership comes at a time when broker-dealers and their advisers are grappling to figure out how to comply with the Department of Labor's fiduciary rule, the final version of which was released in early April. The regulation holds advisers making investment recommendations in accounts such as 401(k)s and IRAs to a fiduciary standard of care, which is more stringent than the current suitability standard to which many are held.

The IRA Fiduciary Adviser program, which will be available this coming fall, provides education and training around how to fulfill fiduciary duties through a series of online modules.

The American Retirement Association is providing the education, while Morningstar is providing complementary tools to help advisers comply with best practices outlined in the education.

Some module topics include core fiduciary training, the Labor Department regulation and practical application of the material, Mr. Graff said. For example, advisers will need to know necessary fiduciary steps and assessments when working with IRAs, such as the types of investment comparisons to include, investment goals, and to what degree to consider additional client assets, he said.

“There are fundamental fiduciary requirements advisers have to comply with that are embedded in the rule, but the rule itself doesn't go through all the explicit requirements someone has to comply with to satisfy their fiduciary obligations,” Mr. Graff said.

There will also be an accreditation program advisers can take after completing the training, whereby they'll earn a designation after passing a test. That program will be available at the beginning of 2017.


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