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DOL fiduciary rule a big win for nontraded REITs

April 8, 2016

The agency’s final reg will allow the asset class to be sold after all

Apr 6, 2016 @ 1:10 pm | By Bruce Kelly | Investment News

Executives in the $10-billion-a-year nontraded real estate investment trust industry likely were doing handstands Wednesday morning after the Department of Labor released its streamlined final version of a regulation that would raise investment advice standards for retirement accounts.

In the DOL’s initial proposal in April 2015, it named certain asset classes that could be included in retirement accounts. Nontraded REITS were not on the list, effectively precluding brokers from using them in individual retirement accounts. Brokers have long sold nontraded REITs to retirees as a way for clients to create an income stream, which was much needed in recent years as interest rates hovered near zero.

In the final version of the fiduciary rule, the DOL has eliminated its list of asset classes, opening the door for nontraded REITS to continue to be placed in those accounts.

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Steve Siepak
Blue Vault session at the recent National Planning Holdings National Conference
September 13, 2017

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