Wealth ManagementDecember 1, 2022January 9, 2023 Breaking Down DOL Brokerage Window Guidance and Cryptocurrency Accounts By: Curi Editorial Team 2 Minute Read WHAT’S HAPPENING? Recently, the U.S. Labor Department issued new 2022 guidance regarding 401(k) retirement plans that offer, or are considering offering, investments in cryptocurrency and/or self-directed brokerage accounts in their plan menu. Most plan sponsors haven’t been concerned about this, primarily due to a lack of guidance regarding the issue of brokerage windows, which have previously not been subject to scrutiny by the DOL. This lack of scrutiny generally caused plan sponsors to set up brokerage windows for participants and then avoid liability for poor investments made by participants. Some plan sponsors’ logic was that once set up, the investments were the sole responsibility of the participants. WHAT’S NEXT? Based on the new guidance, employers could have fiduciary responsibility for participant cryptocurrency trades made through their self-directed accounts. Concurrently, the DOL announced that it will begin an “investigative program” that would require plan sponsors to “square their actions with their duties of prudence and loyalty” if they permit participants to invest in cryptocurrency or invest within their self-directed accounts. The DOL’s stated interest is to now ask plan sponsors to explain why crypto was a part of a participant’s self-directed account. This could easily open the door to a new level of scrutiny for all self-directed investments, which could portend potential plan sponsor liability from both federal regulators and plaintiffs’ attorneys. WHAT YOU NEED TO KNOW You may recall, approximately ten years ago the DOL issued guidance to regulate brokerage windows, but the guidance was taken back after criticism. Since then, we anticipated the DOL’s stated intent to provide more robust fiduciary duties to monitor participants’ self-directed investments—until now. The somewhat nebulous previous guidance made a point to remind plan sponsors that they should not interfere with participant investments as it could lead to fiduciary liability. Many plan sponsors who did offer self-directed accounts took a hands-off approach to investments inside those accounts. This assumption appears to run contrary to the intent of DOL’s prudent fiduciary investment responsibilities. Based on this new guidance, plan sponsors offering, or considering offering, a brokerage account and/or cryptocurrency as an investment option for participants, should discuss and consider possible restrictions with their ERISA counselor and their investment partners. Curi Wealth Management, LLC, dba Curi Capital (“Curi”), is an investment adviser in Raleigh, NC. Curi is registered with the Securities & Exchange Commission (“SEC”). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Curi only transacts business in states in which it is properly registered or is excluded or exempt from registration. A copy of Curi’s current written disclosure brochure filed with the SEC which discusses among other things, Curi’s business practices, services, and fees, is available through the SEC’s website at www.adviserinfo.sec.gov. Curi Editorial Team SHARE News & Knowledge READ NEXT February 2, 2023February 2, 2023Company News | Wealth Management Meet the Curi Capital Team: Spotlight on Sheldon Fox, Senior Director, Family Office Services At Curi Capital, it’s our mission to help clients build true wealth, however they define it. Our team brings the knowledge, experience, and passion to help… Read more November 16, 2022November 18, 2022Wealth Management Understanding Workplace Savings The phrase “workplace savings” doesn’t mean much to most people. If pressed, they might guess that you’re referring to a 401(k)-retirement plan. And for the most… Read more November 16, 2022January 13, 2023Wealth Management Yours, Mine and Ours? When Couples Navigate Money Discussions When you and your partner start to map out common financial goals, your relationship enters a new territory—the money talk. Your goals may start out short-term… Read more