‘DOL Fiduciary Rule by Summer:’ ERISA Attorney Fred Reish

New 401(k) fiduciary rule should hit by summer.

New 401(k) fiduciary rule should hit by summer.

Forget the year of the monkey, 2016 is shaping up to the year of the fiduciary. After all the handwringing, teeth gnashing, anxiety and angst, ERISA giant Fred Reish of law firm Drinker Biddle predicts final fiduciary rules in the “April/May/June timeframe.”

“What will that mean?” Reish rhetorically asks in a recent blog post. “It will re-write the rules for investment advice and sales to retirement plans and IRAs. The impact will vary, depending upon whether the person making the recommendation is an RIA, a broker-dealer, or an insurance agent or broker.”

For example, he notes that for RIAs, the greatest impact will be on investment advisors who recommend retirement plan distributions and rollovers and those who receive additional fees (for example, 12b-1 fees) from their IRA investors.

“On the other hand, advisors of broker-dealers will need to make significant changes in disclosures and compensation practices across the board (that is, for recommendations to plans and IRAs, and recommendations about distributions and rollovers).”

Interestingly, he concludes, the impact on retirement plan sales and advice may be less than is commonly expected.

“However, the impact on advice and sales to IRAs will be nothing short of revolutionary. Similarly, the ‘capturing’ of IRA rollovers, through recommendations to participants to take distributions, will be dramatically affected.”

Read the full blog here.

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