Fred Reish Comments on the DOL’s 401(K) Plan Fiduciary Rule in Bloomberg Law

In “Regulators Face Daunting Court Precedent With 401(k) Advice Rule,” benefits and executive compensation partner Fred Reish commented on the Department of Labor’s plan to redefine when retail investment advisers are subject to strict fiduciary standards of care.

Reish noted that since the agency will be forced to take the long route by undergoing the arduous notice-and-comment rulemaking process to achieve a modified fiduciary definition, it may take the approach of eliminating the problematic part of the test while preserving the rest.

“If the new proposal is intended to be impactful, and I think that it is, it will have to amend the existing regulation to eliminate the ‘regular basis’ part of the five-part test for nondiscretionary fiduciary advice,” he said. “If that prong is removed, and a four-part test remains, rollover recommendations will be fiduciary advice.”

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