June 20, 2019

Fred Reish Quoted in InvestmentNews on Rollover Changes under New SEC Rules

Los Angeles partner Fred Reish was quoted in an InvestmentNews article titled “Reg BI: How rollovers are changing under the new SEC rules.” The article examines how the Securities and Exchange Commission’s new investment advice reforms could impact rolling over assets.

Fred pointed out that the new rules encompass three elements of a rollover recommendation. Those elements include recommendations to: take money out of a 401(k) plan (i.e., it’s not in an investor’s best interest to be in the plan), put that money in an IRA (i.e., the IRA is the best place to put the money), or invest the money (i.e., investment choice).

“I don’t see any difference between the RIA fiduciary standard and the broker-dealer best-interest standard,” said Fred of rollover transactions, noting that the new rollover standard “looks identical” to the SEC fiduciary standard for registered investment advisors.

Fred pointed out that cost can be a “fairly significant factor” in assessing such recommendations. He also said that while FINRA will need to update its rules and regulations to reflect the SEC’s new standard, broker-dealers shouldn’t wait until then to start amending their rollover processes because the implementation deadline is just a year away.

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