Ed Slott: Final DOL Fiduciary Rule Goes 'All-in' on Rollovers

With over $1 trillion per year going from 401(k)s to IRAs, Slott continued, DOL wants “to make sure advisors are doing the right thing.”

The rule — which Slott says “came out just as was expected” regarding IRAs — states that advisors “cannot just say ‘do the IRA rollover’ without going through a process to help clients make the right decision.”

“This ‘process’ is something we have been training advisors on for over 20 years at our 2-Day IRA Workshops,” Slott added. “IRA rollovers often involve a client’s life savings, and advisors need to get educated on the options and the process.”

Labor’s rule highlights the importance of a rollover transaction, Slott relayed, saying that “decisions to take a benefit distribution or engage in a rollover transaction are among the most, if not the most, important financial decisions that plan participants and beneficiaries, and IRA owners and beneficiaries are called upon to make.”

Compliance Overload

Rollovers “were referred to exactly 300 times in the 476 pages,” Slott said. “The big takeaways were essentially the same as the earlier versions” of the fiduciary rule.

The bottom line: “The weight of these rules just seems to me like an overload of paperwork and compliance for most advisors who just want to properly advise and serve their clients,” Slott said. “In the end, it seems to me that the clients will eventually pay the cost for all of this.”

Unfortunately, Slott added, the final rule “is written for what may be some bad apples, which may still be the case after all of this.”