Court Overturns DOL Guidance on Rollover Advice

A federal court has vacated part of the 2021 Department of Labor (DOL) rollover guidance for investment advice fiduciaries (Am. Sec. Ass'n v. DOL, No. 8:22-cv-330-VMC-CPT (M.D. FL Feb. 13, 2023)). In one of those FAQs, DOL said a recommendation to roll over a participant's retirement plan account to an individual retirement account (IRA) may be fiduciary investment advice when the advisor expects to give ongoing advice after the rollover. According to the court, this guidance contradicts the agency's current regulation — originally issued in 1975 — which says advice does not qualify as investment advice unless given to a plan on a "regular basis." The court's ruling likely isn't the last word on rollover advice, since amending the 1975 regulation remains one of DOL's top priorities.