04.29.24

EBSA: Retirement Advisors Compliant With Reg BI are Compliant With Retirement Security Rule

by: Paul Mulholland

Ali Khawar, principal assistant secretary for the U.S. Labor Department's Employee Benefits Security Administration, explained in a webinar that advisors compliant with the U.S. Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI) rule could use the same policies and procedures to comply with Labor's newly finalized Retirement Security Rule. During a Q&A period, Khawar was asked if an advisor could use their Reg BI policies to comply with the new rule. Khawar said: “the short answer is yes.” He added that “there are parts of this that very closely align with Reg BI,” and Reg BI “is absolutely a basis for thinking about compliance” with the Retirement Security Rule. Khawar was also asked if insurance agents must be informed about mutual funds or even licensed to transact in securities to remain compliant with the rule. Khawar answered that he does not expect every insurance agent to be licensed or make filings with the SEC. He did say, however, that an insurance agent selling an annuity to a retirement investor must “understand what it is that the person is giving up as well as what they would buy.”

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