August 01, 2011

Getting Ready for the 408(b)(2) Regs?

Los Angeles partner Fred Reish shared his insights with 401(k) Advisor on how best to prepare for the Department of Labor’s (DOL)  updated fiduciary and ERISA  408(b)(2) regulations, which will become effective in 2012.


In a series of questions and answers, Fred discussed the impact on the 401(k) industry, DOL announcements, the “functional test” that determines fiduciary status, public perceptions of the proposal and how broker dealers should prepare for the changes.


He noted that a lot of broker dealers are “focusing more and more of their 401(k) advisors as specialists,” but also that “the impact on the advisor who is allowed to become a fiduciary is that he will have to levelize compensation and to engage in a prudent process.”


Fred said he believes the 408(b)(2) regulations will have a substantial impact on the industry as broker-dealers roll out new programs to compete in a changed marketplace.


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