Fred Reish Shares Takeaways From DOL’s New Fiduciary Proposal With Law360

In “3 Takeaways From DOL’s New Fiduciary Proposal,” benefits and executive compensation partner Fred Reish spoke to Law360 about the Department of Labor’s (DOL) new proposal to expand what constitutes fiduciary investment advice under the Employee Retirement Income Security Act (ERISA).

Reish noted that a major takeaway from the proposal was the focus on rollovers, as well as related changes to prohibited transaction exemptions, allowing people making rollover recommendations to “keep their commission if they jump through a bunch of hoops.”

Further, Reish explained that if the rule is finalized and a broader set of rollover recommendations are now considered fiduciary investment advice covered by ERISA, more securities advisers, insurance agents and others will have to seek out exemptions from being considered an ERISA fiduciary.

Reish also said he expects a legal challenge potentially directed at the insurance agent exemption in particular: “I think because that’s so much more demanding than current practices, that the insurance industry may end up challenging the rule in court,” he said.

The full article is available for Law360 subscribers.