Rollovers and Fiduciaries: Recent DOL Guidance Expands the Definition of Fiduciary Advice

In a coauthored article for PLANADVISER, benefits and executive compensation partner Fred Reish and counsel Joan Neri answered adviser questions on who is considered an Employee Retirement Income Security Act (ERISA) fiduciary and how to comply with ERISA fiduciary rules.

The questions posed to Reish and Neri were, “I’m a registered investment adviser (RIA) who provides advisory services to individuals. If I recommend that a client roll over plan monies to an individual retirement account (IRA) that I manage, am I considered an Employee Retirement Income Security Act (ERISA) fiduciary? And, if so, what do I need to do to comply with ERISA fiduciary rules?”

In response, the authors explained that under the Department of Labor’s (DOL) expanded interpretation of fiduciary advice, the RIA would be considered an ERISA fiduciary in this case because the rollover recommendation is the first step in providing ongoing advice in the IRA. Thus, the RIA would need to satisfy ERISA’s fiduciary standard of care. They also advised the RIA to comply with the DOL Prohibited Transaction Exemption (PTE) 2020-02.

The full article is available for PLANADVISER subscribers.