DOL fiduciary rule spurred IRA rollover improvements, state regulators say

Broker-dealers are helping investors make better retirement decisions as a result of procedural changes firms have made in preparation for the DOL fiduciary rule, according to a study done by state regulators on the Individual Retirement Account rollover market. ​ "The report's findings spotlight the real and tangible good that came from the Department of Labor's fiduciary rule," said Joseph P. Borg, president of the North American Securities Administrators Association and Alabama Securities Commission Director. He added that "it would be a shame to let the pendulum swing back." The report by NASAA's broker-dealer section was based on a nationwide survey of 96 large, mid-size and small broker-dealer firms to determine the standard of care those firms were using prior to the creation of the DOL rule, and the steps they have been taking in anticipation of the rule's implementation. The rule, scheduled for implementation by April 2017, was vacated by the 5th U.S. Circuit Court of Appeals on March 15. ​ NASAA found that before the rule's adoption, none of the surveyed firms provided a standard of care other than suitability to IRA rollovers. Afterward, many firms reported taking significant steps and expending considerable time and resources to modify their policies and practices for handling IRA rollovers in order to bring these activities into compliance with the rule's best-interest standards. These efforts included developing new policies and procedures and providing guidance to those administering these accounts. ​ Citing Internal Revenue Service estimates, NASAA said that in 2014 alone, approximately $435 billion of retirement funds were rolled from employer-sponsored retirement plans into IRAs by nearly 5 million taxpayers.