The Securities and Exchange Commission (SEC) is making its presence known with respect to retirement account advice that investment advisers and brokers are giving to their clients, in an area that is normally associated with the Labor Department. The SEC is sending financial advisers a 13-page information request that includes 75 queries. This document focuses on recommendations that advisers make to clients in order to rollover their funds from a 401(k) to an individual retirement account, supervision and compliance controls, fees charged, and possible conflicts of interest. Of the 75 questions, 25 are devoted to situations in which the broker serves as the adviser to a managed account qualified default investment alternative. This comes from the DOL, which enforces the Employee Retirement Income Security Act. Over the past few years, the SEC, along with the Financial Industry Regulatory Authority (FINRA) and the DOL have made protecting retirement savers a priority. The SEC announced the initiation of the retirement-advice exam in June. The SEC, who up until now, mainly focused on conflicts of interest surrounding pensions for years, is attempting to better understand how retirement investment products are being distributed.
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