As a result of a new rule proposed by the U.S. Department of Labor, it is likely that financial services firms will be forced to eliminate certain incentives or significantly change compensation structures, reducing the opportunities to motivate and reward top-performing employees and agents.
The rule expands the type of activities subjected to fiduciary care under the Employee Retirement Income Security Act (ERISA), meaning retirement advisors will need to meet new guidelines to show that they are acting in their clients' best interests. Commissions and incentives could be changed, eliminated or require conflict of interest disclosures. It is expected that the ruling will be released sometime in April.
That being said, if your organization is part of the financial services industry, we want to help you stay educated about this issue by proactively working with you to develop new opportunities for incentives and recognition that comply with the DOL rule. For example, let's discuss how this rule may impact future business and assess any financial liability you may have for programs that are already contracted.
Keep in mind that the intention of this rule is to protect lower and middle-income consumers- not to target the meetings and incentives industry. Networks like SITE continue to reiterate the importance and prevalence of incentives to motivate and reward top-performing employees, foster business growth and support the economy.
Ask one of our meeting professionals to go over a list of frequently asked questions compiled by the FICP has compiled for reference on this topic.