Applicability of SEC’s Regulation Best Interest (Reg BI) to Self-Directed Solo 401k Plans

If broker dealers give investment and/or rollover advise to IRA or self-directed solo 401k account holders, it is treated as advice to a retail customer and is therefore subject to the SEC’s Regulation Best Interest (Reg BI) requirements.

The reason recommendations to solo 401k plan are covered by Reg BI is because a solo 401k plan is an owner-only plan. Recommendation types include how to invest the solo 401k funds and, more importantly, rollover recommendations (i.e., to rollover the solo 401k fund to an IRA).

Here is what the SEC says:

“Best Interest to expressly apply to account recommendations including, among others, recommendations to roll over or transfer assets in a workplace retirement plan account to an IRA, … and recommendations to take a plan distribution for the purpose of opening a securities account…”


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About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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