By raising the standard on advisors recommending IRA rollovers to a fiduciary level of care, the Department of Labor’s fiduciary rule may restrict assets in 401(k) plans from flowing to IRA accounts, according to the latest edition of the Cerulli Edge, published by global analytics firm Cerulli Associates.
While the Boston-based firm “strongly agrees” with the intention to raise financial advisors’ standard of care and protect retirement investors from conflicts of interest, the rule’s implicit belief that employer-sponsored plans are the optimal place for retirement savers may have unintended consequences as investors seek to convert accumulated savings to income in retirement.
“The limitations of the defined contribution platform prevent it from being a suitable vehicle for (retirement) income,” analysts at Cerulli write.
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