With so much still up in the air, “focus on what we do know the Department of Labor is expecting from anyone doing 401(k) rollovers,” Steven Niehoff, chief operating officer of the Pension Resource Institute, told attendees at the National Society of Compliance Professionals annual conference in Washington, D.C.

That means paying particular attention to the requirements of the DOL’s fiduciary rule that did go live June 9 -- the new fiduciary standard and the need for advisors to comply with impartial conduct standards. However, the full requirements of the rule won't go into effect before January 1, and could be delayed.

Advisors and reps who want to roll over client accounts from a 401(k) into an IRA should pay particular attention to documenting:

• Who the client is.

• What their goals are.

• A comparison of each client’s existing plan to the IRA rollover recommendation.

“Advisors and reps should always know who their clients are and what their goals are. What’s new is the amount of information needed to do a comparison of what is in the retirement investor’s best interest,” Niehoff said in an interview with Financial Advisor Magazine.

Under the DOL rule, advisors have to be able to demonstrate and document that they have done a full comparison of an investor’s current 401(k) plan and the IRA rollover they are recommending including services, investments, fees and expenses.

At a minimum, advisors should obtain a client’s 401(k) summary plan description, participant fee disclosure notice and four quarterly plan notices, he added.

“You have to be able to say: ‘Steve, this is in your best interest and here’s why,’” Niehoff said.

In addition to acting in a retirement investor’s best interests, the DOL’s transitional rules require that advisors collect no more than reasonable compensation for work on rollovers and make no misleading statements.

It may well be that additional fees are justifiable for a 64 year old who wants active investment management, income distribution services and estate planning. But justifying the higher fees for an IRA rollover may be a far tougher sell in the case of a 29 year old, who just needs investments and regular statements, he said.

“You have to go through a prudent process each time you’re recommending a rollover,” Niehoff added.

The time to get this right is now, when the DOL has said it is more interested in helping advisors get things right during the rule’s transitional period.

“It is true that right now the DOL is saying their focus is on compliance support rather than enforcement,” Niehoff said. “They will want to see you are trying.”

Firms should be able to demonstrate they have training programs in place and have written documentation of their practices and procedures for rollover clients. At a minimum, they should be able to show DOL regulators they are in the process of putting these compliance pieces in place for retirement investors.

Will you be able to tell regulators that you know that your advisors know what the rule is, that it has taken effect and that their business practices will need to change?

“Some firms are very well prepared and some are just getting started or are in the middle right now,” said Niehoff, whose firm offers consulting, training materials, webinars, templates, practice management and compliance resources to broker-dealer and registered investment advisor firms.

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