KYC for IRA Rollovers
Exactly What Does the SEC and DOL Say You Should Consider
The DOL and SEC have largely harmonized their requirements for rollover recommendations. The DOL’s fiduciary
interpretation and its PTE 2020-02 requirements have settled on a 5-step best interest process for those
recommendations. The SEC guidance includes the first 4 steps.
The DOL and SEC agree on the first step: KYC, or know you customer or client. In other words, both regulators
agree that a best interest process for rollover recommendations begins with obtaining and considering the
investor profile for the participant and that the profile should include the information that a reasonable person
would evaluate to decide if a rollover recommendation is in the best interest of the participant.
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