May 07, 2024

Fred Reish Discusses the Impact of the DOL Final Fiduciary Rule with InvestmentNews

InvestmentNews reported that the Department of Labor issued the final version of its investment advice rule last week, a sweeping change that makes one-time IRA rollover recommendations a clear fiduciary act, and sought insight on the rule’s impact from benefits and executive compensation partner Fred Reish.

“The greatest impact will be on rollover recommendations, which will now almost always be fiduciary recommendations, where the advisor or agent will owe the participant a duty of care and a duty of loyalty, meaning that [they] will need to carefully and thoughtfully examine the alternatives available to the participant,” said Reish.

Conflicts of interest that arise will fall under the two amended prohibited transaction exemptions, known as PTE 2020-02 and 84-24, Reish also noted. “When a rollover is recommended, there will be conflicts of interest because the advisor will make money from the rollover IRA, or the insurance agent will make money from the rollover annuity.”

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