American Investment Services, Inc.

Disciplined, Diversified, & Cost Effective

Jul. 2022 – Rollovers, Regulation, and the Household Investor

The Department of Labor (DOL) has instated new rules pertinent to investors who are considering a rollover of an IRA, 401(k) or other specified account to an account managed by a registered investment adviser (RIA) or broker-dealers (BDs).

Rollovers have for decades served as a simple and flexible means of transferring assets held in employer-sponsored retirement plans to an IRA, either self-managed or managed by an RIA or BD. An RIA can provide a wide array of investment options, consolidation of household assets with a single provider, professional services such as financial planning, and potentially a more cost effective arrangement.

From the DOL’s perspective, however, there is a conflict of interest to the extent that RIAs and BDs, who are compensated for assets managed, often encourage investors to rollover accounts and/or facilitate rollover transactions. Rollovers to accounts managed by RIAs or BDs are now in fact prohibited, except under certain circumstances or if actions are taken to warrant an exemption. Exemptions require that the service provider explain why the rollover is justified, including a detailed accounting of all current and anticipated costs and benefits. The article on page 52 provides more detail.

When working with prospective and current clients we have always endeavored to examine each investor’s alternatives thoroughly before recommending our services. If we conclude it is in a client’s best interest to delay hiring us, or to leave all or a portion of their assets as they are currently established, that is exactly what we recommend. We take the long view; our growth is predicated on building longstanding relations built on trust.

No regulatory agency can protect you from fraud, cybercrime, self-dealing or myriad other schemes. All the disclosures in the world cannot protect against a clever crook or incompetent advisor. Your best defense is to educate yourself. The Investment Guide is intended to assist you in that effort.

Also In This Issue

Quarterly Review Of Capital Markets
Rollovers… Why So Many Questions?
Estimated Tax Payments: The Facts
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Asset Class Investment Vehicles