Uncle Sam taketh away, and then he giveth.

The U.S. Department of Labor’s fiduciary rule imposes a high standard on advisors making recommendations to retirement accounts—standards that appear to forbid the use of certain annuities, managed account programs and other products within retirement accounts—but it also gives advisors a powerful exemption that allows the use of such products to continue: the best interest contract.

The fiduciary rule, released last month in its final form, forbids advisors to receive variable commissions for conducting transactions within a client’s retirement account, said Marcia Wagner, principal of the Boston-based Wagner Law Group, in a web conference last month.

“In order to earn commissions that vary by product, the transaction would need to qualify for an exemption,” Wagner said. “To address that need, the DOL created the best interest contract exemption, or BICE.”

The exemption is the most sweeping form of relief from the most stringent parts of the rule. It can be used for any assets and products offered to retirement plan and IRA investors, as long as the advisor is providing non-discretionary advice.

“I want to highlight the fact that the BICE does not provide relief from any variable compensation rising from the discretionary advice of fiduciary advisors,” Wagner says. “Let’s say the investment manager has the ability to invest IRA assets without approval from the end client. If they earn any compensation or revenue sharing, the arrangement would be a violation of the prohibited transaction rules and the BICE would not apply because the advice is discretionary. It’s a complicated exemption.”

The exemption will permit firms to use many of their current compensation models as long as they acknowledge their fiduciary status, give prudent and impartial advice, disclose potential conflicts of interest and information about their revenue model, avoid misleading statements and receive no more than reasonable compensation.

The sale of variable annuities and fixed-indexed annuities to plan accounts and IRAs is now only permissible through the exemption.

There are four different types of best interest contracts, or BICs, classified by Wagner: the full-blown BIC, the disclosure BIC, the streamlined BIC and the transition BIC.

The full-blown contract applies to advice provided to IRAs and non-ERISA plans and will be the most relied-on variation, Wagner said.

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