new rules for rollover retirement accounts are coming Friday 7/1/2022

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arcticpineapplecorp.
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new rules for rollover retirement accounts are coming Friday 7/1/2022

Post by arcticpineapplecorp. »

just saw this in the news. If it's already been posted, mods please merge (didn't see it after a search):
https://www.barrons.com/advisor/article ... eid=yhoof2
Later this week, advisors handling retirement portfolios will face new requirements to ensure that the advice they are providing is in their clients’ best interest...

“The DOL requires specific considerations when making rollover recommendations, and it also requires a written disclosure to the client outlining why the recommendation was in the best interest of the client,” Ed Wegener, managing director of governance, risk, and compliance at Oyster Consulting, wrote in a blog post explaining the new requirements.

With the rollover rule that takes effect this week, advisors will have to document an analysis that includes alternatives to the rollover, fees and expenses associated with the employer plan and the IRA, whether the employer pays any share of administrative expenses, and the various levels of services and investments available through the plan and the IRA...

The comparative analysis with a client’s employer plan will be a heavy lift, according to Wegener...

Advisors relying on that exemption are eligible for commissions, 12b-1 fees, and other forms of compensation that would otherwise be prohibited. But to enjoy that safe harbor, they must adhere to the new set of regulatory requirements.

That includes abiding by the DOL’s Impartial Conduct Standards, issuing a formal, written affirmation of an advisor’s fiduciary status under Erisa, and providing clients with written disclosures about conflicts of interest, according to a compliance guide issued by the DOL.

The Impartial Conduct Standards include an obligation to make recommendations in a client’s best interest, charge reasonable fees, and avoid misleading statements when providing advice.

https://www.barrons.com/advisor/article ... eid=yhoof2
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David Jay
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Re: new rules for rollover retirement accounts are coming Friday 7/1/2022

Post by David Jay »

If they have justify their AUM fee, this will be, as the article says, a "heavy lift".
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Alan S.
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Re: new rules for rollover retirement accounts are coming Friday 7/1/2022

Post by Alan S. »

In a 6/15 Nerds Eye View article, Kitces states that these rules also apply to IRA to IRA rollovers:
At a basic level, PTE 2020-02 expands the definition of a “prohibited transaction” under ERISA to include any recommendation for rolling over 401(k) assets into an IRA (or from one IRA to another) when doing so would increase the compensation for the advisor. To qualify for an exemption to this rule, advisors must comply with six key conditions:
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celia
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Re: new rules for rollover retirement accounts are coming Friday 7/1/2022

Post by celia »

A few years ago, there were new rules similar to this but they were quickly rescinded. What’s the difference compared to these new rules? (I don’t even know what words to search for.)

Who remembers what happened about 5 years ago that had a similar intent??
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cheese_breath
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Re: new rules for rollover retirement accounts are coming Friday 7/1/2022

Post by cheese_breath »

celia wrote: Thu Jun 30, 2022 10:51 pm A few years ago, there were new rules similar to this but they were quickly rescinded. What’s the difference compared to these new rules? (I don’t even know what words to search for.)

Who remembers what happened about 5 years ago that had a similar intent??
I might be wrong, but it seems to me the rules were developed by the Obama administration and rescinded by the Trump administration.
The surest way to know the future is when it becomes the past.
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