In “Brokers Advised to Remove Rollovers From Sales Contests,” Financial Advisor Magazine shared takeaways from benefits and executive compensation partner Fred Reish and investment management partner Jeffrey Blumberg during a Faegre Drinker webinar on what registered investment advisers (IRAs) need to know about Department of Labor (DOL) requirements.
Blumberg detailed recommendations for mitigating conflicts of interest at the rep level. “If you include rollover assets in that contest or in that assessment, that creates an even stronger incentive for that rep to make sure the money comes over.” He further emphasized that firms should be careful about any revenue-sharing programs when it comes to rollovers.
Reish explained how some registered investment advisers (RIAs) may not realize that “if they get payments from custodians and noncash payments, that that could be a conflict of interest.” He added, “The DOL rule considers conflicts to be money or anything of monetary value. If you get a trip, a computer or anything out of the Securities and Exchange Commission (SEC) soft-dollar definition, that’s a conflict. There has to be mitigation and disclosure, so be careful,” he added.