News and Case Studies

DOL abandons appraiser-as-fiduciary rule

In late January, the Department of Labor (DOL) announced that it will abandon the “appraiser-as-fiduciary” rule from its planned reproposal of a broader fiduciary rule. As reported in the January 2015 issue of ASA’s Capital Action publication, the ASA has learned that when the DOL reproposes a broad set of rules affecting fiduciaries and prohibited transactions, the proposal will not include a proposal to classify appraisers as fiduciaries in connection with valuations of employee stock ownership plans (ESOPs).

This is great news for business appraisers.  If appraisers had been subjected to the duties of fiduciaries when performing an ESOP valuation, they would have been placed in a position of owing a special duty of care to a party to the ESOP transaction, which runs counter to the objective, unbiased role appraisers are supposed to play in any valuation assignment.  In addition, the additional risks and cost of fiduciary insurance coverage that would have been imposed on appraisers would likely have made ESOP valuations cost prohibitive for all but the largest valuation firms.


John G. Mack, ASA, MCBA, ABAR – Nationwide Valuations – (303) 496.0643 (direct) (303) 586.4554 (fax)

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