FINRA And SEC To Focus On IRA Rollover Practices In 2014

Financial institutions should prepare for increased regulatory scrutiny.

The Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) released their examination priorities for 2014 on January 2 and January 9, respectively.¹ Among both organizations' priorities are practices related to recommendations to transfer, or "roll over," assets from an employer-sponsored retirement plan to an individual retirement account (IRA). These announcements follow FINRA's Regulatory Notice 13-45,² which was issued on December 30, 2013 and which provides guidance on brokers' responsibilities concerning IRA rollovers. FINRA also recently issued an investor alert, "The IRA Rollover: 10 Tips to Making a Sound Decision," highlighting issues (including tax consequences, fees and expenses, and conflicts of interest) that FINRA believes an investor should be aware of in deciding whether to roll over assets to an IRA.³ Broker-dealers and registered