401(k) ROLLOVERS " INVESTORS PULLED A NET $11.4 BILLION FROM TAX-DEFERRED SAVINGS PLANS IN 2013 ...ENDING DECADES OF EXPANSION. " Law Firm P.C. " It's smack dab in the IRA rollover space. " The question in ...well, question reads as follows: " Can an adviser and financial institution rely on the level fee provisions of the BIC Exemption for investment advice to roll over from an existing plan to an IRA if the adviser does not have reliable information about the existing plan's expenses and features? " The BIC Exemption (or Best Interest Contract Exemption) allows for commissions to be charged if the advisor is providing non-discretionary advice. And the answer? " ...The streamlined level fee provisions of the BIC Exemption require advisers and financial institutions to document the reasons why the advice was considered to be in the best interest of the retirement investor. The documentation must take into account the fees and expenses associated with both the existing plan and the IRA; whether the employer pays for some or all of the existing plan's administrative expenses; and the different levels of services and investments available under each option. " In order to satisfy the requirement, the DOL writes that the advisor and financial institution must " make diligent and prudent efforts " to obtain information on the existing plan. In general, such information should be readily available as a result of DOL regulations mandating plan disclosure of information to the plan's participants. " Should " is the operative word. Some firms have already decided it's simply too risky. In early November, Bank of America Merrill Lynch announced new rules specifically prohibiting its brokerage clients buying mutual funds in their commissioned-based IRAs. " It's going to push a lot of other firms to not want to do rollovers; basically they won't want to do the work that it entails, " Rosenbaum concludes. " Will it be worth their time or expense to try and get the IRA rollover? They'll not only have to look at the rollover, but at the overall 401(k) plan and business in order to ensure that it's in the best interest. No one will want to take on that fiduciary liability. " ISSUE 4 2016 | 401kSpecialistmag.com 35http://www.401kSpecialistmag.com