The fiduciary rules for retirement advice in 2026 are a patchwork. The Department of Labor’s 2024 Retirement Security Rule, which would have made almost any personalized retirement recommendation a fiduciary act, was struck down in federal court and formally removed from the Code of Federal Regulations in March 2026.1U.S. Department of Labor. US Department of Labor Restores Long-Standing Investment Advice Rule After Pair of Court Decisions Vacate 2024 Retirement Security Rule What protects you now depends on who your advisor is: ERISA’s narrow 1975 five-part test still governs fiduciary status for retirement plan advice, the SEC’s Regulation Best Interest covers broker-dealers, the Investment Advisers Act imposes a fiduciary duty on registered investment advisers, and most states now require insurance agents to act in your best interest when recommending an annuity. Between those four frameworks sits a gap around one-time rollover advice that the DOL has twice tried and failed to close.
Why the Rules Look Different Now
The DOL finalized the Retirement Security Rule in April 2024 to replace the 1975 test. It would have treated any financial professional as a fiduciary whenever they made a personalized recommendation to a retirement investor in their professional capacity, sweeping in insurance agents, broker-dealers, and annuity salespeople who had operated outside ERISA’s fiduciary requirements.2U.S. Department of Labor. Retirement Security Rule: Law and Regulations
Courts in the Eastern and Northern Districts of Texas stayed the rule in July 2024, and later rulings vacated it entirely. In March 2026 the DOL removed it from the Code of Federal Regulations and restored the prior regulatory text. The 2024 amendments to Prohibited Transaction Exemption 2020-02 were also vacated, reverting that exemption to its original December 2020 form.3Federal Register. Retirement Security Rule: Definition of an Investment Advice Fiduciary – Notice of Court Vacatur It was the DOL’s second failed attempt; a similar 2016 rule was vacated by the Fifth Circuit in 2018 on the same grounds, that the department had exceeded its statutory authority.
When ERISA Treats Your Advisor as a Fiduciary
Under the restored 1975 regulation at 29 CFR ยง 2510.3-21, someone giving investment advice about your retirement plan is a fiduciary only if all five of the following are true:
- They make recommendations about buying, selling, or managing securities or other plan property.
- They provide that advice on a regular basis, as part of an ongoing relationship rather than a single interaction.
- There is a mutual understanding that the advice will serve as a primary basis for investment decisions.
- The advice is individualized to the particular plan or participant.
- They receive a fee or other compensation in connection with the advice.
Every element has to be present. If one is missing, the advisor is not an ERISA investment advice fiduciary, no matter how influential the recommendation turned out to be. This is the framework’s central weakness, and it is the gap the DOL has twice tried to close.
The Rollover Gap
The “regular basis” requirement leaves a well-known hole around IRA rollovers. When you retire or change jobs, a financial professional often recommends moving assets out of an employer-sponsored 401(k) into an IRA. That recommendation is typically a single event. The DOL’s own FAQ on PTE 2020-02 acknowledges that “a single, discrete instance of advice to roll over assets from an employee benefit plan to an IRA would not meet the regular basis prong of the 1975 test.”4U.S. Department of Labor. New Fiduciary Advice Exemption: PTE 2020-02 Improving Investment Advice for Workers and Retirees Frequently Asked Questions
The stakes are high. A rollover often shifts a worker’s entire retirement savings from a plan with institutional pricing and employer oversight to a retail IRA where fees can be substantially higher. Under the restored five-part test, the advisor making that recommendation frequently has no ERISA fiduciary obligation to put your interests first. SEC rules or state insurance regulations may still apply depending on the advisor’s license, but the strongest federal retirement protections under ERISA usually do not.
Regulation Best Interest for Broker-Dealers
If your advisor is a broker-dealer, the SEC’s Regulation Best Interest applies whenever they recommend a securities transaction or investment strategy to a retail customer. Reg BI took effect in June 2020 and was unaffected by the DOL rule’s vacatur.5U.S. Securities and Exchange Commission. Regulation Best Interest It does not use the word “fiduciary,” but it imposes obligations beyond the old suitability standard.
Reg BI has four component obligations. The broker-dealer must provide written disclosure of material facts about the relationship, including fees, services, and conflicts, before making a recommendation. The care obligation requires reasonable diligence and skill, a reasonable basis to believe the recommendation is in the particular customer’s best interest, and a prohibition on excessive trading. The conflict-of-interest obligation requires written policies to identify and disclose all conflicts, mitigate those that create incentives to put the firm first, and eliminate sales contests tied to specific products. The compliance obligation requires written policies designed to achieve compliance with the whole regulation.
“Retail customer” covers anyone using the recommendation primarily for personal, family, or household purposes. If your advisor holds a Series 7 license and recommends securities in your IRA or brokerage account, Reg BI governs the recommendation regardless of whether ERISA’s five-part test is met.
Fiduciary Duty for Registered Investment Advisers
Registered investment advisers have operated under a separate fiduciary standard for decades, and that standard was never part of the DOL rulemaking. Under the Investment Advisers Act of 1940, every RIA owes its clients a duty of care and a duty of loyalty. The SEC confirmed in a 2019 interpretive release that this duty applies to the entire adviser-client relationship, cannot be waived, and requires the adviser to serve the client’s best interest without subordinating it to the adviser’s own.6U.S. Securities and Exchange Commission. Commission Interpretation Regarding Standard of Conduct for Investment Advisers
The duty of care requires the RIA to give advice in the client’s best interest, seek best execution when selecting broker-dealers for trades, and monitor the relationship over time. The duty of loyalty requires full and fair disclosure of all material conflicts. An RIA that earns higher fees on one product than another must disclose that conflict and cannot let it drive recommendations.
If your professional is a fee-only RIA rather than a broker-dealer, this fiduciary standard already covers your relationship regardless of what happens with ERISA rulemaking.
Best-Interest Rules for Annuity Buyers
Annuity sales are regulated by state insurance departments, and here the picture has improved. The National Association of Insurance Commissioners adopted a revised model regulation requiring insurance producers to act in the consumer’s best interest when recommending an annuity. The model includes a care obligation to understand the consumer’s financial situation and recommend suitable products, a disclosure obligation covering compensation and scope of the relationship, a conflict-of-interest obligation, and a documentation requirement.7National Association of Insurance Commissioners. Suitability in Annuity Transactions Model Regulation 275
A majority of states have adopted some version of the model. If an insurance agent recommends a fixed index annuity or other annuity product, state law in most jurisdictions now requires the agent to put your interest first for that transaction, even where the federal ERISA fiduciary standard does not reach. Coverage varies, so your state insurance department can confirm whether the best-interest standard applies where you live.
How to Tell Which Rules Apply to You
The rule that protects you depends on the license your advisor holds and the product being recommended. Ask directly: Are you a registered investment adviser, a broker-dealer, an insurance agent, or some combination? A single person can wear more than one hat, and the applicable standard shifts with the transaction.
- Advice about your 401(k) from someone in an ongoing paid advisory relationship: ERISA fiduciary rules apply if the five-part test is met.
- A one-time recommendation to roll a 401(k) into an IRA: ERISA fiduciary rules usually do not apply. Reg BI applies if a broker-dealer is making the recommendation, and the Advisers Act applies if an RIA is.
- Any securities recommendation from a broker-dealer to a retail customer: Regulation Best Interest.
- Ongoing advice from a registered investment adviser: Investment Advisers Act fiduciary duty.
- An annuity recommendation from a licensed insurance agent: the state best-interest standard in most states.
Fee structure is another signal. Fee-only advice from an RIA carries the strongest built-in alignment. Commission-based advice can still be lawful and can still be in your best interest, but the conflicts are more layered and the disclosures matter more.
If You Believe a Fiduciary Mismanaged Your Plan
When ERISA fiduciary duties do apply, breaches carry real consequences. A fiduciary who breaches those duties is personally liable to restore losses to the plan and to return any profits made through the misuse of plan assets, and courts can order removal and other equitable relief.8Office of the Law Revision Counsel. 29 USC 1109 – Liability for Breach of Fiduciary Responsibility
The Department of Labor’s Employee Benefits Security Administration investigates suspected violations and accepts complaints from participants, beneficiaries, and other sources.9U.S. Department of Labor. Fiduciary Investigations Program You can file through the Ask EBSA portal at askebsa.dol.gov or by calling 1-866-444-3272.
ERISA also gives participants a private right of action. Participants in defined-contribution plans like 401(k)s can sue to recover losses caused by a fiduciary breach. The statute of limitations is six years from the date of the breach or three years from the date you first knew about it, whichever comes first; if the breach was concealed by fraud, you get six years from the date you discover it.10Office of the Law Revision Counsel. 29 USC 1113 – Limitation of Actions
One boundary worth knowing: participants in traditional defined-benefit pension plans generally cannot sue for fiduciary mismanagement unless their pension benefits are actually at risk. The Supreme Court held in 2020 that because defined-benefit participants receive a fixed monthly payment regardless of investment performance, they lack the concrete injury needed to bring a federal lawsuit unless the plan is in danger of defaulting.
Until Congress or a future administration changes the rules, the rollover gap persists. Your best protection is knowing which framework governs the person sitting across the table, and asking the questions that make the answer clear before you act on the advice.