Broker-dealers of all sizes began taking significant steps to modify and develop new policies and procedures for IRA rollovers to comply with the Department of Labor’s fiduciary rule before the rule was vacated by the 5th Circuit Court of Appeals, according to a just-released survey by the North American Securities Administrators Association.
The report, conducted by NASAA’s Broker-Dealer Section throughout May 2017, was based on a nationwide survey of 96 large, midsize and small broker-dealer firms to determine the standard of care they were using before Labor’s rule as well as steps firms were taking in the run-up to the rule’s implementation.
The survey polled BDs on the standard of care they had in place for IRA rollovers between April 1, 2017 and May 29, 2017 — prior to the DOL rule’s best-interest standard being legally required.
None of the broker-dealers surveyed were providing a standard of care other than “suitability” to IRA rollovers prior to June 9, 2017, when the DOL’s rule took effect.
“The report’s findings spotlight the real and tangible good that came from the Department of Labor’s fiduciary rule,” said Joseph Borg, NASAA president and Alabama Securities Commission director, in a statement.
NASAA cites Internal Revenue Service estimates that in 2014, approximately $435 billion of retirement funds were rolled from employer-sponsored retirement plans into IRAs by nearly 5 million taxpayers.