A Compliant Process for Plan-to-IRA Rollovers

In an article for PlanAdviser, benefits and executive compensation partner Fred Reish and counsel Joan Neri detailed how registered investment advisers (RIA) can comply with current Department of Labor (DOL) rules while the new fiduciary rule remains halted by the courts. 

The authors note that the DOL’s guidance about what is considered a compliant process for fiduciary advisers is similar to the process from the Securities and Exchange Commission’s (SEC) standards. Under both the SEC and DOL guidance, they write, the best interest process generally consists of the same steps, which include: 1) Obtaining information about the plan participant that is needed to make a best interest recommendation; 2) obtaining information about the participant’s plan features and the contemplated rollover IRA, including the investments, services and costs in each; and 3) evaluating the information collected in (1) and (2) to determine the option (i.e., staying in the plan or rolling over) that is in the participant’s best interest.  

Reish and Neri conclude by advising RIA’s to undertake a best interest compliance process for recommendations, regardless of whether it is considered a fiduciary act under the DOL’s rules, because those rules and the SEC’s are similar.