Fred Reish and Brad Campbell Comment on the Pending Fiduciary Rule Decision in ThinkAdvisor

In ThinkAdvisor’s article “No Final Decision on DOL Fiduciary Rule — Yet,” benefits and executive compensation partners Fred Reish and Brad Campbell discuss the pending fiduciary rule in Texas.

“Essentially, the Texas court in the FACC case on the 2020 [rollover] guidance reaffirmed the status quo, as its decision largely mirrored,” a Florida court's ruling in another case  said Campbell. In February 2023, a Florida district court vacated parts of DOL’s fiduciary rule interpretation related to rollover advice, specifically the "regular basis" component.

As it stands, “if an advisor does not have a relationship with a plan, the advisor can recommend a rollover without being a fiduciary,” Reish said. “However, it is not clear that the advisor would not be a fiduciary for a rollover recommendation to a participant if the advisor is a fiduciary advisor to the plan or a fiduciary advisor to that participant (e.g., manages the participant’s account).”

Neither decision regarding PTE 2020-02 “materially affects the 2024 Fiduciary Rule,” Campbell added. Two Texas courts have stopped the fiduciary rule from taking effect.

The DOL has until mid-August to respond. Taking all the recent court decisions together, “the bottom line is that a rollover recommendation, standing alone, is not fiduciary advice,” Reish said.

The full article is available to ThinkAdvisor subscribers.