Insights | 07.08.20
DOL Rule's Rollover Exemption a Surprise. But Is it Enforceable?
After the 5th U.S. Circuit Court of Appeals vacated the Obama-era fiduciary rule in 2018, few expected the Department of Labor's (DOL) revised rule, meant to better align with the SEC’s Regulation Best Interest, to include any expansion of fiduciary standards. Fred Reish, a partner with Drinker Biddle’s Employee Benefits and Executive Compensation Group, said he was surprised to find that it may extend ERISA’s fiduciary standard to some rollover recommendations that would not have been subject to that scrutiny in the past. “That was a shock, an absolute shock, and that means that most rollover recommendations made by advisors with broker/dealers would be fiduciary recommendations, because the reason the advisor recommends a rollover is to manage an IRA,” Reish said. But Reish cautioned that an uncertain future for DOL enforcement, coupled with the loss of investors' right to pursue legal action in the case of recommendations or undisclosed conflicts, may still leave many consumers without much recourse.
Read the full article on WealthManagement.com.