Concept shot of a businessman with money covering his mouth

Content provided by Kylee Beach, CLS General Counsel

In the Department of Labor’s (DOL’s) first set of Frequently Asked Questions (FAQs) concerning the DOL’s new fiduciary rule, the DOL reiterated that the Best Interest Contract Exemption (BIC Exemption) provides that advisors cannot use differential compensation to make recommendations that are not in the best interest of their retirement client.  The DOL disapproves of advisers preferentially recommending certain investments simply because they can increase their compensation.

CLS believes in the importance of providing clients with a wide array of investment strategies for their managed account—all in accordance with a standardized fee schedule.  Through our Risk Budgeting Methodology, we are able to customize a client’s portfolio to accommodate a client’s unique investment objectives, all in accordance with their risk tolerance.  Accordingly, on the CLS platform, when you recommend CLS’s strategies, you can rely on the “level fee fiduciary” exemption.  The “level fee fiduciary” exemption streamlines the compliance requirements for your use of the BIC Exemption.

For a current listing of CLS’s strategies as well as the associated fee schedules, please visit CLS’s Form ADV Part 2A.