Los Angeles partner Fred Reish and Washington, D.C., partner Brad Campbell were quoted in a BenefitsPro article titled “Advisors, Brokers Slacking on Compliance Under Fiduciary Rule.” Fred and Brad suggest that many brokers and advisors may be failing to comply with the fiduciary rule’s best interest standard when advising on distributions from employer-sponsored retirement plans and rollovers to IRAs.
Brokers and advisors must complete a comparison of investment fees in 401(k) plans and fees in IRAs, or use Form 5500 plan information data or open-source benchmarking on retirement plan fees to back a rollover recommendation. Advisors must disclose if they use the latter option.
“I haven’t seen prudent and diligent efforts to obtain (plan) information before that warning is provided,” Fred said.
While the Department of Labor has said that it won’t enforce the rule as long as firms are making a good-faith effort to comply, Brad noted that “[p]eople can get a little too complacent on where DOL is on enforcement. I haven’t seen DOL enforcement activity, but that doesn’t mean it isn’t coming.”
Read “Advisors, Brokers Slacking on Compliance Under Fiduciary Rule.” (subscription required)