The proposal has no prohibited-transaction exemption for advisors with discretion over client assets, said Brian Graff, CEO of the ARA, which was formerly known as the American Society of Pension Professionals and Actuaries.
“So in effect, [RIAs are] prohibited from accepting rollovers under the current proposal,” Graff said.
Observers are hopeful that the DOL will fix the rule by clarifying that RIAs can use the BICE or by creating another exemption for RIAs.
The ARA has proposed a separate “levelized compensation advice” exemption for fee-based advisors.
Reish likes the idea of a separate exemption. “You then don’t have the volumes of disclosures [required with the BICE] that don’t have any application” to RIAs, he said.
“We don’t know for sure what the DOL will do,” the ARA’s Graff said, “but we’ve had good conversations with them and feel they recognize the need to address the issue.
A final rule from the DOL is expected to come out in the first half of next year.