Recent headlines declaring the death of the Biden-era Retirement Security rule have left many wealth and retirement professionals asking the same question:

What actually changed?

The answer is simpler than the headlines suggest.

A federal judge has formally vacated the Department of Labor’s 2024 Retirement Security Rule — the Biden administration’s attempt to expand fiduciary obligations around retirement advice. The regulation would have broadened ERISA fiduciary status to cover a wider range of retirement recommendations, including one-time advice such as IRA rollovers and annuity purchases.

But because courts had already blocked the rule before it ever took effect, its formal demise does not change the current compliance framework for advisors.

In other words:

The regulatory landscape governing rollover advice today remains exactly where it has been for several years.

And at the center of that framework sits one critical requirement:

PTE 2020-02.

 

A 15-Year Regulatory Saga

To understand the current moment, it helps to step back.

For more than a decade, the Department of Labor has repeatedly attempted to redefine what constitutes fiduciary “investment advice” under ERISA and the Tax Code.

There have been three formal attempts:

2010 – The First Attempt
The DOL proposed changes to the fiduciary definition but withdrew the proposal after industry pushback before it could be finalized.

2016 – The Conflicts of Interest Rule (BICE)
This rule dramatically expanded fiduciary obligations for advisors providing retirement advice. It was finalized and briefly implemented but was vacated nationwide by the Fifth Circuit Court of Appeals in 2018.

2024 – The Retirement Security Rule
The Biden administration’s third attempt sought to extend fiduciary standards to more retirement advice interactions, including rollover recommendations and insurance product sales.

However, the rule never became applicable. Two federal courts issued nationwide stays shortly after it was finalized, halting implementation while litigation proceeded.

Earlier this month, a federal judge approved a motion to formally vacate the rule, ending the regulatory effort. For firms navigating compliance, the key takeaway is straightforward:

The framework governing retirement advice today is unchanged.

 

What Actually Governs Retirement Advice Today

With the Retirement Security Rule vacated, the regulatory structure governing retirement advice remains:

The 1975 Five-Part Test

The definition of fiduciary investment advice under ERISA continues to be governed by the longstanding five-part test, which determines when a financial professional becomes a fiduciary.

Under that test, a recommendation must:

• Be provided on a regular basis
• Pursuant to a mutual understanding
• That the advice will serve as a primary basis for decisions
• And be individualized to the investor

If these conditions are met, fiduciary obligations apply.

But in practice, many retirement recommendations — especially rollovers — may not satisfy the five-part test.

That’s where PTE 2020-02 becomes critical.

 

Why PTE 2020-02 Still Matters

Despite confusion in recent coverage, PTE 2020-02 is not a fiduciary rule. It is a prohibited transaction exemption.

Its purpose is simple:

It allows firms and advisors to receive compensation — including commissions — in situations where fiduciary advice could otherwise trigger prohibited transactions under ERISA.

But to rely on that exemption, firms must meet strict conditions, including:

• Acting in the best interest of the investor
• Documenting the basis for rollover recommendations
• Identifying and mitigating conflicts of interest
• Providing written disclosures
• Maintaining supervisory and compliance oversight

In other words:

PTE 2020-02 operationalizes fiduciary conduct when conflicts exist.

And critically:

It remains fully in effect.

Even if the Biden-era rule disappears entirely, firms must still comply with PTE 2020-02 when making rollover recommendations that create compensation conflicts.

 

The Real Compliance Challenge: Rollover Documentation

For most firms, the practical impact of PTE 2020-02 centers on one area:

Rollovers.

When advisors recommend moving assets from a workplace retirement plan to an IRA, they must demonstrate that the recommendation is in the client’s best interest.

That requires firms to evaluate and document:

• The client’s existing plan features
• Investment options and costs
• Services available under each option
• Fees and compensation differences
• The client’s specific financial circumstances

Regulators have made it clear that this process cannot be treated as a simple disclosure exercise.

It must be structured, documented, and supervised.

This is where many firms struggle.

Manual processes, fragmented documentation, and inconsistent supervisory review can expose firms to significant regulatory risk.

 

Compliance and Growth Are Converging

While the latest development continues to generate headlines, the underlying trend in the industry is clear.

The line between retirement advice and wealth management is disappearing.

Rollovers represent one of the largest asset transitions in the financial system — with trillions of dollars moving from employer plans into IRAs over time.

That makes rollover advice a focal point for both:

• Regulators, concerned about conflicts of interest
• Firms, seeking to capture new assets

The result is a new operating reality:

Compliance is no longer a back-office function.
It is part of the advisor growth strategy.

 

Technology Is Becoming the Compliance Backbone

Meeting PTE 2020-02 obligations consistently across thousands of advisors is not something firms can manage through manual workflows.

Firms increasingly need systems that can:

• Identify rollover opportunities
• Analyze plan-to-IRA comparisons
• Document best-interest rationale
• Maintain digital audit trails
• Support supervisory review

In other words:

Compliance must be operationalized through technology.

This is exactly why many firms are investing in purpose-built compliance platforms designed specifically for rollover supervision.

 

The Bottom Line

Despite the dramatic headlines surrounding the demise of the Biden-era rule, the reality for firms is far less dramatic.

Three things remain true:

1. The Retirement Security Rule never took effect.
2. The 1975 five-part fiduciary test continues to govern investment advice.
3. PTE 2020-02 remains fully in force.

For advisors and firms operating in the wealth-retirement convergence era, that means one thing above all:

Rollover advice must be documented, supervised, and demonstrably in the client’s best interest.

And as the industry continues to converge — with retirement assets increasingly flowing into wealth advisory relationships — the firms that succeed will be those that treat compliance not as an obstacle, but as an operational advantage.

Because in today’s environment, the firms best positioned for growth are the ones that can demonstrate — clearly, consistently, and at scale —

that their advice meets the highest standard of care.