Dalbar and the Retirement Learning Center (RLC) have combined forces to offer advisors two free virtual courses to help them comply with the Department of Labor’s “radical changes in compliance procedures” for retirement rollovers, which go into effect February 23.
The complimentary courses are being offered concurrently with the go-live date of the DOL’s “Improving Investment Advice for Workers and Retirees Prohibited Transaction Exemption rule (PTE 2020-02), which defines a rollover recommendation as a fiduciary act requiring an exemption.
The rule also provides that exemption through a rigorous five-part test for advisors who want to accept conflicted compensation such as 12b-1 fees and commissions for selling proprietary products.
“With the new PTE rule going into effect on Tuesday, we think many advisors would be interested in taking the complimentary courses to comply with the new rollover regulations,” Dalbar spokesperson Jamie Josephs said in an email. The classes will be offered through the newly-created virtual learning program i-LearnERISA, a joint venture between DALBAR and RLC.
The CE classes are complimentary for candidates who register by February 28. Both courses are scheduled for release on March 15, 2021 and will include the latest available regulatory information. The first two audiovisual classes are “Navigating the New Rollover Reality” and “Compliance for Rollover Fiduciaries.”
The rules create fairly dramatic changes for advisors and firms, requiring that a compliance review of rollover recommendations from IRAs and qualified retirement plans take place before the recommendations are made to prospective or existing clients, Dalbar said. The new reviews cannot be postponed to be concurrent with a client decision, but must occur prior to recommendations being presented.
Firms and advisors have just two alternatives to taking on the significant cost associated with rollover compliance reviews: to stop offering rollover recommendations or to allow clients to use robo-advice only.
The courses are designed to help advisors recognize common distribution options and rollover scenarios and “implement a systematic process for repeating compliant rollovers benefit your clients and limit liability for advisors and their firms,” RLC President John Carl said.
The U.S. currently has $32.57 trillion ripe for rollovers and locked in retirement accounts. That is more retirement assets than any other nation in the world, representing 62% of worldwide assets, according to The Thinking Ahead Institute's global pension assets study.
“As the peak of rollover activity approaches for this immense market, i-LearnERISA provides continuing education credits for financial professionals who must act appropriately under PTE 2020-02 and Securities and Exchange Commission (SEC) rules,” Dalbar said.
“PTE 2020-02 is a vivid example of the need to rapidly implement new practices for a large number of professionals in a short time. Billions of dollars of rollovers are occurring daily so every day that passes means lost opportunities,” Dalbar President Lou Harvey said.