Fred Reish Quoted in the Media Regarding Final DOL Fiduciary Rule

Los Angeles partner Fred Reish has been quoted in a number of media outlets regarding the Department of Labor’s final  fiduciary rule. The rule, which was released earlier this month, enforces tighter standards on retirement-account advice.

In a LifeHealthPro article, Fred commented on the DOL’s broadened definition of fiduciary advice. “A consequence of that definition is that virtually all common investment and insurance sales to plans, participants and IRAs will be fiduciary acts,” he said. “While the conditions have been liberalized, they will require more effort and expense.”

Fred told The Wall Street Journal that the complexion of conversations advisers are allowed to have with their clients will change. For instance, postregulation, an adviser cannot recommend a client roll over money from a 401(k) to an IRA. Fred said that there isn’t a specific carve-out in the new regulation allowing this to take place, so if the investor wants more advice, it will be difficult for an adviser without a BIC to make a suggestion without violating the fiduciary standard. “Sooner or later, most 401(k) participants are going to ask, ‘What should I do?’” he said. “In such a situation, there will be a lot of pressure on the adviser to say, ‘I think you should do this,’ which is a fiduciary act.”

In RIABiz, Fred said that RIAs will be affected by the rule, particularly those with affluent clients and those who do not understand retirement rules. “They understand level fee and live within those rules but they don’t do much retirement work and they don’t realize that if they get any compensation from a custodian – even a free conference – and then put IRA money with that custodian – it can be a prohibited transaction,” he said. “They’re not doing anything wrong, but they don’t understand the rules. Some don’t even understand what a prohibited transaction is.”

“It is the biggest change I’ve seen in ERISA since 1974,” Fred told Financial Advisor. “We’re all fiduciaries now.”

Read The Wall Street Journal’s How Retirement Advice Is About to Change

Read The Wall Street Journal’s The New Regulatory Hurdle for IRAs

Read The Wall Street Journal’s Some Advisers Err in Thinking They Won’t Be Affected By New Rule

Read RIABiz’s The DOL’s final rule contains a litany of 11th hour concessions to brokers that show Wall Street lobbyists earned their keep

Read RIABiz's Why luring 401(k) assets to IRA rollovers in a post-DOL-rule world remains child's play 

Read Financial Advisor’s Fiduciary Experts: ‘Historic’ Rule Here To Stay

Read Financial Advisor’s RIAs Shouldn’t Kid Themselves They’re in the Clear Over DOL Rule

Read BenefitsPro’s Advisory firms face headwinds from DOL fiduciary rule