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SEC Draws a Bead on 401(k) Specialists

Continuing to deliver on its promise to focus on 401(k) plans and IRAs under its ReTIRE (Retirement Targeted Reviews and Examinations Initiatives) program, the SEC is focusing examinations on retirement advisors. Onsite visits under the program began in November.

The SEC examiners are focused on:

  • retirement-specific titles and designations;

  • marketing materials and sales scripts related to 401(k) distribution options;

  • disclosure of fees, especially related to revenue sharing; and

  • proof that disclosures were made.

401(k) specialists and managers of QDIAs seem to be of particular interest.

Under Dodd Frank, the SEC was given the authority to create a uniform fiduciary rule, which has been overshadowed by the DOL’s conflict-of-interest rule — even though some experts believe that the SEC should have taken the lead.

Clearly, IRAs are becoming the focus of regulators and lawmakers as more money moves in their direction. Why? Because IRAs are not nearly as regulated as ERISA plans, and because of the inherent conflicts that can arise if an advisor recommends their own services for managing IRAs without proper disclosure.