Let’s not overcomplicate it. A federal court wiped out the 2024 Retirement Security Rule, and the Department of Labor responded the only way it really could—by reverting to the old five-part fiduciary test. That’s not reform. That’s not progress. That’s hitting rewind and pretending the last few years were just a bad sequel nobody wants to talk about.
What Actually Happened (Without the Nonsense)
Here’s the clean version you can explain without needing a whiteboard. The DOL tried to expand fiduciary status, especially to capture one-time advice like rollovers and annuity recommendations. The courts looked at that and said the agency overreached. Not a little—fundamentally. Instead of continuing the fight, the DOL stepped back, and with that, the rule collapsed. We are now back to the same framework that has governed this space for decades.
The core issue was simple. The DOL tried to stretch fiduciary status beyond ongoing advisory relationships and into transactional sales conversations. The courts weren’t buying it. They made it clear that without a real, continuing relationship of trust and reliance, you don’t get to call someone a fiduciary just because money is changing hands.
The Five-Part Test: The Cockroach That Won’t Die
The five-part test survives again, and at this point, it feels indestructible. Advice must be given for a fee, on a regular basis, under a mutual understanding that it will serve as a primary basis for decisions, and it must be individualized. Miss one element and fiduciary status falls apart.
That’s why rollover advice has always been so slippery. It’s often a one-time interaction, not part of an ongoing advisory relationship, and that distinction matters. The DOL has tried repeatedly to blur that line. The courts keep drawing it right back.
My Take: This Was Always Going to Happen
Let me be blunt. This outcome was predictable. The DOL keeps trying to solve a problem that really requires Congress to act, not regulators trying to reinterpret a statute written for a different era. Each time they push too far, the courts step in and remind them where the boundaries are.
We’ve seen this movie before. Different rule, same ending. At some point, it stops being about poor drafting and starts being about the limits of what ERISA actually allows. You can’t retrofit a 1970s law to fully regulate a modern rollover-driven retirement system without running into legal walls.
The Real Issue Nobody Wants to Say Out Loud
This debate gets dressed up as participant protection, but let’s not kid ourselves. This is about money, specifically rollover money. That’s where the battles are being fought, and that’s where the incentives collide. The insurance side wants flexibility. Broker-dealers want to operate under Regulation Best Interest. RIAs want a broader fiduciary standard. The DOL wants to expand its authority. The courts keep pushing back. Meanwhile, billions in retirement assets are moving every year, and everyone wants a piece of that flow. That’s why this issue never goes away. It’s not philosophical. It’s economic.
What This Means for You
From a practical standpoint, we’re back to where we were. The compliance framework doesn’t suddenly change. The five-part test governs. PTE 2020-02 remains part of the landscape. Advisors still operate in a world where fiduciary status depends on facts and circumstances rather than bright-line rules. Rollovers remain the gray area they’ve always been. Some advisors will structure their practices to avoid fiduciary status. Others will embrace it. Either way, the lack of clarity isn’t going anywhere.
The Ary Rosenbaum Bottom Line
This isn’t a win for one side or a loss for another. It’s a reminder of the structural problem. ERISA was designed for ongoing retirement plan relationships, not for a marketplace dominated by rollovers, IRAs, and one-time advice interactions. Until Congress steps in and rewrites the rules for the modern retirement system, regulators will keep trying to stretch the existing framework, and courts will keep pulling it back. And every few years, we’ll get another headline, another rule, and another reversal. Different day. Same result.
