With $5.7 trillion in assets and growing, the IRA market is hard to ignore. However, advisors acting as plan fiduciaries have to be more careful — the DOL is taking a much closer look at how clients interact with their plan advisor fiduciaries. Add the DOL’s proposed redefinition of fiduciary regulatory initiative plus anticipated increased scrutiny as a result of last spring’s GAO “sting” report on rollovers and FINRA’s concern about fee miscommunication, and you’re facing a regulatory minefield.
To help address these concerns, Pershing hired ERISA expert Fred Reish to help plan advisors, especially those acting as plan fiduciaries, stay clear of trouble. His advice includes:
• Define fiduciary services so as not to include rollovers.
• Make it clear that actions taken by participants to roll over assets are their choice.
• Provide unbiased educational material about alternative services.
• Have written disclosures about fees and expenses.
Getting ahead of potential IRA issues by creating prudent procedures by plan advisors acting as fiduciaries is a wise decision as regulators and legislators turn their attention to this market.
