News | 10.10.19
SEC's Reforms Spark Debate Over "Ugly" IRA Rollovers
The SEC in June approved new rules regarding the advice savers receive about their investments, yet a debate is raging over whether the measures offer sufficient protection to investors deciding whether to transfer retirement funds into IRAs. Money transfers from retirement plans into IRAs can mean higher commissions paid out to brokers as well as higher expenses borne by the investors. Under the new SEC rules, brokers now need to have a “reasonable basis” to believe the IRA rollover is in the customer's best interest “at the time of the recommendation." John Lukanski, a partner at Reed Smith, says he has heard “ugly stories” about brokers switching client accounts to secure compensation. But he adds that IRAs are not necessarily worse than 401(k)s as long as a suitable account is chosen.
Read the full article on Financial Times