PUBLIC SUBMISSION

As of: 7/5/15 10:34 AM

Received: June 25, 2015

Status: Pending_Post

Tracking No. 1jz-8jmf-cqta

Comments Due: July 21, 2015

Submission Type: Web

Docket: EBSA-2010-0050

Definition of the Term ‘‘Fiduciary’’; Conflict of Interest Rule—Retirement Investment Advice; 

Notice of proposed rulemaking and withdrawal of previous proposed rule.

Comment On: EBSA-2010-0050-0205

Definition of Fiduciary; Conflict of Interest Rule-Retirement Investment Advice and Related 

Proposed Prohibited Transaction Exemptions; Hearing and Comment Period Extension

Document: EBSA-2010-0050-DRAFT-0336

Comment on FR Doc # 2015-14921

Submitter Information

Name: Oren Peretz

Address: 

PO Box 17600

Encino, CA, 91416-7600

Phone: 818-905-1224

General Comment

Section VII- Exemption for Pre-Existing Transactions

The implied grandfathering element described in Section VII needs to apply to all covered 

accounts subject to the DOL proposal for all past and future purchase, sale, and holdings before 

the Applicability Date.

Section VII needs to clearly and fairly preserve existing business models and existing client 

relationships that were based on an existing regulatory framework that, in most cases with small 

accounts, are already heavily regulated by the Securities and Exchange Commission (SEC), 

Financial Industry Regulatory Authority (FINRA), and the States.

For existing accounts, the DOL proposals will ultimately cost existing accounts more to the 

majority of small investors it aims to protect. This is based on the need to wrap these accounts 

under a fiduciary platform to comply with the proposal and the increased fiduciary liability, 

whether the existing client wants it or not. If the proposed rule is not unconditionally 

grandfathered, the rule will also cause abandonment of smaller IRA accounts that were in 

existence before the Applicability Date, thereby ultimately harming the exact investor the DOL 

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is seeking to protect.

Specifically, Section VII subsection (b)(3) that The Advisor and Financial Institution do not 

provide additional advice to the plan regarding the purchase, sale, or holding of the Asset after 

the Applicability Date needs to be removed due to the potential financial harm to the client 

following reasons, respectively:

Purchase

1) Many older IRAs, for example those held in variable annuities, have living benefits and/or 

death benefits that are no longer available for additional deposits. Several product lines have 

been discontinued but still require discussion of the holdings mentioned in this section. The 

existing IRA account would have to be charged separately in order to comply with proposals to 

re-certify and re-qualify the existing IRA which may no longer pay a commission on new 

deposits.

2) Last minute IRA deposits by existing accounts, delivered personally to an advisors office, 

might not be processed in a timely manner as a delay would be necessary to meet the proposed 

new rules before being able to accept such deposit. This could cause the depositor undue 

financial harm and advisor liability. 

Sale:

Discussion of non-deposit matters including redemptions, reallocations, required minimum 

distributions, change of beneficiary, investment changes, authorized discussion with third 

parties (e.g. accountant, attorney, business manager) would trigger new rule compliance. This 

would necessitate compliance under the proposed rule causing a possible lengthy delay in recertifying the account to meet the exact new rules this grandfathering proposal should be 

protecting.

Holding:

1) Any communication regarding holding (mailing of statements, prospectus, annual reports) to 

the existing IRA could immediately constitute a violation of the exact exception the section is 

meaning to make. The very nature and fallout of this proposal would be to ignore or abandon 

the existing IRA accounts in order to avoid being in violation of this proposal.

2) Reverse Churning element of fee-based accounts would be in violation of current SEC 

directives to put inactive (e.g. buy and hold) IRAs back into non-fee based accounts due to lack 

of activity. Since DOL directives could lead to a requirement to hold these accounts in some 

form of an asset-based fee account for advisor compensation, the directive would violate the 

exact violation the SEC is enforcing. 

Current rules, best-practices, and industry standards already require continued compliance with 

Anti-Money Laundering Laws, Patriot Act, Privacy Policy, time-defined updating of account 

data, and electronic communications. This, along with possible increased fiduciary duty on 

established accounts, will increase the time, attention, and liability required to carry a smaller 

IRA account size, which will lead to abandonment of these existing smaller accounts.

Because of all the unique sets of circumstances as discussed in these comments that cannot be 

properly addressed from the past given the magnitude and complexity of the different products, 

vendors, and individual account histories, the need to grandfather existing IRA accounts in their 

entirety before the Applicability Date must be included in any final DOL proposal. 

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After being in this industry for over 28 years and understanding the small IRA market well as 

they are a majority of my client base, I can say it would be nearly impossible to go back and 

retroactively meet new rules for not only my existing smaller IRA accounts, but the millions of 

IRA accounts out there that fall into this category. 

Oren Peretz

Branch Manager

First Allied Securities Inc.

Member FINRA/SIPC

(818)905-1224 Monday-Friday 7am-1pm (pacific time)

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