I have been saying all along that rollovers are going to be a very rough and difficult business after the new Fiduciary Rule gets final. You can just tell by the Department of Labor’s (DOL) stance in their Fiduciary Rule Q&A.
According to Q&A 14, even an advisor who is going to charge a level fee to meet the best interest contract exemption must get information on an existing plan in order to determine whether it’s in the best interest of the plan participant to rollover assets from that plan. Even if the advisor can’t get that plan information, they must seek out alternative sources such as the Form 5500 or a reputable benchmark to demonstrate that it’s in the participant’s best interest to rollover. While this documentation requirement is stated in the level fee provision of the Best interest contract exemption, the DOL reiterated that any Fiduciary seeking such best interest standards should engage in a prudent analysis of factors and considerations to show that the rollover is the right thing for the Fiduciary to do.
So the good old days where closing the case was all about filling out rollover forms, the burden is going to be on the advisor to demonstrate that a rollover is in the former participant’s best interest.