DOL fiduciary rule’s ‘grandfathering’ exemption may be lost by changing firms

Advisers banking on “grandfathering” pre-existing investments in retirement accounts under the Labor Department’s fiduciary rule may not be able to rely on the provision indefinitely.

As it turns out, industry executives and regulatory experts believe advisers switching firms could lose the grandfathering privilege upon switching firms, leading to a potential stymying effect on adviser recruitment and moves.

“It would really be a gray area as to if grandfathering would be lost,” Marcia Wagner, principal at The Wagner Law Group, said. “But who would want to take that risk?”

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