Let\u2019s not overcomplicate it. A federal court wiped out the 2024 Retirement Security Rule, and the Department of Labor responded the only way it really could\u2014by reverting to the old five-part fiduciary test. That\u2019s not reform. That\u2019s not progress. That\u2019s hitting rewind and pretending the last few years were just a bad sequel nobody wants to talk about.<\/p>\n
What Actually Happened (Without the Nonsense)<\/p>\n
Here\u2019s the clean version you can explain without needing a whiteboard. The DOL tried to expand fiduciary status, especially to capture one-time advice like rollovers and annuity recommendations. The courts looked at that and said the agency overreached. Not a little\u2014fundamentally. Instead of continuing the fight, the DOL stepped back, and with that, the rule collapsed. We are now back to the same framework that has governed this space for decades.<\/p>\n
The core issue was simple. The DOL tried to stretch fiduciary status beyond ongoing advisory relationships and into transactional sales conversations. The courts weren\u2019t buying it. They made it clear that without a real, continuing relationship of trust and reliance, you don\u2019t get to call someone a fiduciary just because money is changing hands.<\/p>\n
The Five-Part Test: The Cockroach That Won\u2019t Die<\/p>\n
The five-part test survives again, and at this point, it feels indestructible. Advice must be given for a fee, on a regular basis, under a mutual understanding that it will serve as a primary basis for decisions, and it must be individualized. Miss one element and fiduciary status falls apart.<\/p>\n
That\u2019s why rollover advice has always been so slippery. It\u2019s often a one-time interaction, not part of an ongoing advisory relationship, and that distinction matters. The DOL has tried repeatedly to blur that line. The courts keep drawing it right back.<\/p>\n
My Take: This Was Always Going to Happen<\/p>\n
Let me be blunt. This outcome was predictable. The DOL keeps trying to solve a problem that really requires Congress to act, not regulators trying to reinterpret a statute written for a different era. Each time they push too far, the courts step in and remind them where the boundaries are.<\/p>\n
We\u2019ve seen this movie before. Different rule, same ending. At some point, it stops being about poor drafting and starts being about the limits of what ERISA actually allows. You can\u2019t retrofit a 1970s law to fully regulate a modern rollover-driven retirement system without running into legal walls.<\/p>\n
The Real Issue Nobody Wants to Say Out Loud<\/p>\n
This debate gets dressed up as participant protection, but let\u2019s not kid ourselves. This is about money, specifically rollover money. That\u2019s where the battles are being fought, and that\u2019s where the incentives collide. The insurance side wants flexibility. Broker-dealers want to operate under Regulation Best Interest. RIAs want a broader fiduciary standard. The DOL wants to expand its authority. The courts keep pushing back. Meanwhile, billions in retirement assets are moving every year, and everyone wants a piece of that flow. That\u2019s why this issue never goes away. It\u2019s not philosophical. It\u2019s economic.<\/p>\n
What This Means for You<\/p>\n
From a practical standpoint, we\u2019re back to where we were. The compliance framework doesn\u2019t suddenly change. The five-part test governs. PTE 2020-02 remains part of the landscape. Advisors still operate in a world where fiduciary status depends on facts and circumstances rather than bright-line rules. Rollovers remain the gray area they\u2019ve always been. Some advisors will structure their practices to avoid fiduciary status. Others will embrace it. Either way, the lack of clarity isn\u2019t going anywhere.<\/p>\n
The Ary Rosenbaum Bottom Line<\/p>\n
This isn\u2019t a win for one side or a loss for another. It\u2019s a reminder of the structural problem. ERISA was designed for ongoing retirement plan relationships, not for a marketplace dominated by rollovers, IRAs, and one-time advice interactions. Until Congress steps in and rewrites the rules for the modern retirement system, regulators will keep trying to stretch the existing framework, and courts will keep pulling it back. And every few years, we\u2019ll get another headline, another rule, and another reversal. Different day. Same result.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" Let\u2019s not overcomplicate it. A federal court wiped out the 2024 Retirement Security Rule, and the Department of Labor responded the only way it really could\u2014by reverting to the old five-part fiduciary test. That\u2019s not reform. That\u2019s not progress. That\u2019s … Continue reading