I see the Department of Labor’s fiduciary proposals affecting registered investment advisors in a number of ways that would make it difficult for them to work with 401(k) plan participants who have retired or changed employment and may want to roll over assets from a 401(k) plan to an individual retirement account, or in situations to help a client make changes to their IRA investments.

If an RIA gets paid for recommending a rollover of a client’s 401(k) investments into an IRA or recommends an investment that’s proprietary to their company or an affiliate of their company, those would be considered prohibited transactions. If the RIA is involved in making “prohibited” transactions, they will have to comply with the DOL’s proposed “best interest contract exemption” (BICE). Complying with these BICE contracts would be quite expensive and difficult to manage.

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