April 21, 2009

Retirement advice faces magnified regulator scrutiny

Attorneys tell Dow Jones Newswires that regulators appear to be cranking up enforcement where it concerns retirement investment advice.

According to a Tuesday report by the News Corporation company, the federal government "appears to be targeting so-called prohibited transactions, such as financial advisers recommending funds or service providers that pay advisers higher fees than funds or providers that might be less expensive and more appropriate, according to Jason Roberts, a partner at Reish Luftman Reicher & Cohen, a law firm in Los Angeles with an employee benefits practice."

A March report by the law firm says the Department of Labor has "markedly increased its examination and enforcement activity directed at broker-dealers and registered investment advisers."

The DOL has postponed rules intended to increase retirement plan participants' level of access to professional retirement advice.

Roberts tells Dow Jones the overall message from regulators seems to be "If you are going to service retirement plans, you had better know what you're doing."

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