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Regulations from the U.S. Department of Labor that expand liability for financial advisors who give pension rollover advice went into effect on July 1.

“While aspects of the rule were already in effect, now advisors must also provide the mandated written explanation to rollover clients of the specific reasons as to why the investment professional and/or financial institution believe that the rollover is in the client’s best interest or else face substantial potential liability,” according to a report from WTW. “This exposure is likely to trigger coverage under professional liability policies, as opposed to fiduciary liability policies that protect plan sponsors.”

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