Glossary · Compliance and regulation
Rollover rationale
Rollover rationale is the documentation supporting a recommendation to move assets out of a workplace retirement plan, comparing that move against leaving the assets in the plan.
Advice to roll plan assets into an account the advisor will be paid on is generally a prohibited transaction, and firms rely on an exemption whose conditions include this documentation. The comparison is expected to weigh fees and expenses on both sides, whether the employer pays plan administrative costs, and the services and investments available in each.
Worth adding, though not on the official list: creditor protections differ between plan assets and an individual retirement account, and how much depends on the client's state.
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