October 06, 2023

Fred Reish Quoted by CNBC on Anticipated DOL Rules

CNBC turned to benefits and executive compensation partner Fred Reish for insight on anticipated U.S. Department of Labor rules expected to crack down on investment advice relative to rollovers from 401(k) plans to individual retirement accounts (IRAs).

“It may not cause fewer rollovers, but it will almost certainly cause more thoughtful rollovers,” Reish said of his expectation for the forthcoming rule. He added that most recommendations made by brokers, insurance agents and others to roll over money to an IRA aren’t subject to a so-called “fiduciary” standard of care — meaning investors may not be getting advice that’s in their best interests.

Among the other big changes, Reish explained that Employee Retirement Income Security Act protections would give investors the right to sue someone in court for bad rollover advice. Currently, that private right of action generally doesn’t apply to investment advisers, brokerage firms, insurers, banks or trust companies — only their respective regulators (and not individual investors) can enforce their rules, he noted.

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