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Changes to 401(k) Rollovers

Changes to 401(k) Rollovers

September 01, 2020

In a time of so much uncertainty, people are keeping a close eye on their wallets and looking to the people they trust with their money for advice and guidance. Earlier this summer, the Securities and Exchange Commission enacted a new rule that aims to increase transparency between investors and their financial advisors.


Known as “Regulation Best Interest,” the new standard mandates investment advisors and broker-dealers make certain disclosures to their clients. Every investor, including those who work with Zephyrus Financial Services, will receive a Client Relationship Summary, or Form CRS, from their advisor outlining the services a firm offers, the fees and costs you will have to pay for those services and any conflicts of interest an advisor may have.


At Zephyrus Financial Services, communication and transparency have always been at the forefront of our guiding principles. We operate as fiduciaries, which means we are held to the highest standards of trust, good faith and honesty. Educating clients about their money and making sure they understand what we are doing is a priority.


Additionally, the new regulations will change the way 401(k) rollovers are handled. Advisors will now run down a list of factors and compare the benefits and disadvantages of rolling a 401(k) into an IRA. With a new set of steps in place to execute the rollover, investors now need to complete additional tasks before the rollover is finalized.

Here is a checklist that outlines and organizes the new rollover process.

So, what does this change mean for financial advisors and brokers? In short, the regulation increases the liability for business owners. According to Investment News, a comparative analysis between a client’s 401(k) and an IRA based on several factors must be completed before a rollover is initiated.


If you have any additional questions on what Regulation Best Interest means for you and your retirement plan, please do not hesitate to contact us. At Zephyrus Financial Services, we provide clients with a customized financial roadmap that addresses the needs of each individual. We'd love to sit down with you, review your customized financial roadmap and plan for your unique retirement needs.


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