New Guide Helps CFP® Pros Navigate Rollovers

When a client switches jobs or retires from the workforce, one of the questions you are likely to get is, “Should I roll over my employer retirement plan?” That simple question can lead to significant consequences. How a rollover is handled can set the client on a better path to meeting their retirement goals, but the wrong move can result in the client having to pay higher fees, taxes or penalties.

CFP Board’s new Guide to Applying the Fiduciary Duty to Rollovers can help CFP® professionals provide financial advice on whether to roll over assets from an employer plan while fulfilling their fiduciary obligations and adhering to CFP Board’s Code of Ethics and Standards of Conduct.

Financial advice to roll over assets into an IRA raises several Material Conflicts of Interest that a CFP® professional must disclose and manage. The guide applies to a rollover recommendation the 7-step process for complying with the Duty of Care when providing financial advice. A CFP® professional may follow this 7-step process to act in the best interests of the client when providing financial advice about a rollover.

The guide:

• Provides examples of the qualitative and quantitative information about the client’s personal and financial circumstances that a CFP® professional should gather;
• Clarifies that financial advice about a rollover consists of several related, but distinct, recommendations;
• Identifies four potential alternative courses of action and 10 features of the client’s current employer plan and each alternative that a CFP® professional should, if applicable, consider; and
• Describes eight characteristics of each alternative course of action that a CFP® professional might assess in developing a recommendation.

To learn more about financial advice for rollovers, explore CFP Board’s Guide to Applying the Fiduciary Duty to Rollovers.