A few months ago, I wrote about promoters fishing for retirement plan dollars. I talked about the call of early retirement for the Boomers and retirement plan provisions that permit in-service distributions – all factors that are apparently attracting promoters to get at that cash. The NASD concerned about this danger to retirement plan participants issued an Investor Alert.
Along a similar line, Sandra Block in last Friday’s USA TODAY reports that rolled-over cash might not be secure. She discusses the recent memo that the NYSE’s enforcement arm posted on its website reminding member firms that they are required to recommend investments appropriate for investors rolling over retirement benefits.
So here is something to keep in mind. All of this takes place in a non-ERISA environment which means that brokers are not fiduciaries. Their obligation is only to recommend "suitable investments" while meeting certain disclosure and sales rules.