Fred Reish asks whether the DOL, SEC and FINRA are working together on IRA rollovers, or whether they have independently reached the same conclusion — that the act of advising whether a plan participant should take a rollover should come under greater scrutiny.
Reish cites FINRA’s Regulatory Notice 13-45 from late last year in which the SRO reminded members that suitability applies to the act of recommending a rollover, not just to the investments that are recommended.
Meanwhile, FINRA and the SEC have stated that rollovers are a top priority. At the same time, the DOL’s redefinition of fiduciary rule — last reported to be out this August — would make the IRA recommendation a fiduciary act. Last year, the GAO issued a report on misleading pricing practices of IRA rollover providers, leading to calls for action by members of Congress.
And while advisors and their broker dealers are certainly concerned, Reish raises the question of whether record keepers should be worried about all this activity in Washington too — just as Schwab seems to be willing to throw down the gauntlet if their plan sponsor clients do not allow them access to participants to sell them rollovers.
