Los Angeles partner Fred Reish was quoted in an ASPPA Net article titled, “‘4-Part Harmonization' on Rollovers.”
Advisors seeking to capture IRA rollovers face a “four-part harmonization” of regulatory and other government entities -- that is, SEC, DOL, FINRA and GAO -- in Fred’s opinion. His harmonization comment was a riff on the issue of the need for the DOL and the SEC to coordinate their separate efforts to revamp the definition of a fiduciary, but Fred believes that it's no coincidence that all four entities seem to be headed to the same destination. “I have to think they are talking to each other,” he said.
If that's the case, their combined impact would be a force to be reckoned with. The DOL can regulate distributions from DC plans, Fred noted, “and if there's no distribution, there's no IRA rollover.” Fred highlighted the commonalities among the 2013 GAO report, DOL Advisory Opinion 2005-23A and FINRA Regulatory Notice 13-45, and both FINRA and the SEC included IRA rollover practices as an examination priority in 2014.
Fred suggested a conservative approach for advisors playing in the IRA rollover market: provide written disclosures of services, fees and expenses for the IRA and its investments. The key issue, he said, is to follow the lead of the regulatory entities and pay close attention to the financial well-being of the participant: “If the expenses in the IRA will be higher than in the plan, what is the justification for doing an IRA rollover?”
To read the entire article, click here.