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February 28, 2022

Fred Reish Speaks to Bloomberg Law About New DOL Rollover Standards

Bloomberg Law reported on the Department of Labor’s (DOL) enforcement of a regulation that is forcing financial professionals to apply a strict fiduciary standard of care on all their transactions. Benefits and executive compensation partner Fred Reish discussed the impact on insurers and financial brokers who advise workplace retirement clients.

“It looks like the world is coming to a one-size solution, which is that we’re almost always going to assume it’s fiduciary advice, and we’re going to assume we need one exemption or the other to avoid violating the law,” said Reish.

According to the publication, the insurance companies Reish advises are applying the latest fiduciary exemption to almost all of their rollover recommendations because it would be too costly to discern the varying relationships that independent agents have with their own clients.

“Everything is in play now,” Reish noted. “The prohibited transactions exemptions are needed; the fiduciary definition applies. We’re past the effective date and past the non-enforcement policy into the ultimate compliance period.”

Regarding DOL guidance from April and whether fixed-rate, variable and fixed-indexed annuities meet the fiduciary definition, Reish explained that it did not change the way his clients treat all three types of annuities. “The insurance companies and broker-dealer companies have said to me, ‘Fred, we can’t deal with it at that level. We have to have a program that treats them all the same,’” he stated. “All of my clients are just assuming that they’re all fiduciary recommendations — that they all are going to be having ongoing financial advice.”

The full article is available for Bloomberg Law subscribers.

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