October 01, 2022

Financial Advisor Magazine Recaps Faegre Drinker Webinar About DOL Self-Correction Provision

In a recent article, Financial Advisor Magazine recapped Faegre Drinker’s “Inside the Beltway” webinar that benefits and executive compensation partners Fred Reish and Brad Campbell presented on Aug. 18, 2022.

The article highlighted how broker-dealers and registered investment advisors are requesting legal advice on how to correct violations of a new United States Department of Labor (DOL) rule that determines how they give advice on retirement rollovers.

Reish explained that advisors who want to recommend retirement fund rollovers must apply for an exemption to demonstrate that the rollover is in the client’s best interest. Advisors must follow impartial conduct standards and self-correct any violations in their recommendations if they want an exemption from these prohibited conflicts, added Reish.

The attorneys noted that the self-correction process is not well-defined. “There is real ambiguity regarding what the DOL thinks a self-correction should look like. What will DOL say when they start doing investigations?” Campbell asked.

According to the article, the DOL stated it will not deem it a violation if there are no investment losses, but a firm or advisor must make the investor whole if there are losses.

“I think if a firm has made a mistake and goes through the self-correction process and reports to the DOL, I don’t think there will be any adverse consequences to that,” said Reish.

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