Fiduciary Advice for Rollovers: A New Decision in an Old Case

AUGUST 15, 2025 | By Fred Reish Defined Contribution Insights

After years of back-and-forth on fiduciary advice for rollovers, there’s finally some clarity.

The recent news about a Texas Federal District Court striking down a fiduciary rule has created some confusion. This article explains the court’s decision and its meaning to financial professionals.

During the first Trump administration, the Department of Labor (DOL) issued a Prohibited Transition Exemption (PTE 2020-02) that included, in its preamble, an expanded interpretation of the fiduciary definition—the regulatory 5-part test for determining whether a recommendation is fiduciary advice. The PTE then created, with conditions, an exemption for conflicted recommendations. A conflicted recommendation includes, for example, a recommendation to a 401(k) plan participant to take the benefits out of the plan and to roll them over to an IRA with the financial professional. The conflict is that the financial professional will earn compensation from the recommendation, e.g., commissions or fees from the rollover IRA.

The views expressed here are those of Fred Reish. They should not be construed as investment advice or as the views of Hartford Funds or the employees of Hartford Funds. They are based on available information and are subject to change without notice. The information above is intended as general information and is not intended to provide, nor may it be construed as providing, tax, accounting or legal advice. As with all matters of a tax or legal nature, please consult with your tax or legal counsel for advice. This material and/or its contents are current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Fred Reish.

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About The Author

Fred Reish

JD, Partner, Faegre Drinker

Fred Reish is an ERISA attorney whose practice focuses on fiduciary responsibility, retirement income, and plan operational issues. He has been recognized as one of the “legends” of the retirement industry by both PLANADVISER magazine and PLANSPONSOR magazine.