fi360 Blog

Four questions to ask of your retirement plan

The confluence of the arrival of the "Boomer" generation to retirement, the increase in litigation regarding the management of employer retirement plans, and heightened consumer skepticism of the role of advisors has resulted in an environment in which employers need to take greater control of the retirement plans they are making available to their employees.

In the latest fi360 Article Competition entry, AIF designee John Sullivan of World Equity Group presents four major questions plan sponsors need to ask of themselves and the plan they are offering in order to limit their own liability and provide a retirement vehicle that truly works for the participants:

1. Is there a process in place to manage the plan that is written, current, properly executed, and consistent with the “Prudent Man” rule? In other words, is the retirement plan managed as well as your business and with the same care?
2. Are the plan assets used solely for the benefit of the participants and their beneficiaries?
3. Are the investment choices prudent?
4. Does the plan provide retirement income security for our employees?

With what is at stake both for the employer and employee in regards to a company retirement plan, why wouldn't you treat it with the same careful consideration and prudent execution that you do your business?

* * * *

The winner of the article competition receives a $1,000 prize at our 2010 National Conference. For more information on the fi360 article competition and to download other entries, visit the article competition home page. 

If you have any feedback on the article, submit it to resources@fi360.com or in the comments section below.

A new era for the fi360 Blog

We are very pleased to welcome a new audience to the fi360 Blog today, as this is our first post as the From the Fiduciary blog of InvestmentNews.

As CEO of fi360, I am excited by the opportunity to share our fiduciary insights with the readers of InvestmentNews and grateful to IN Editor Jim Pavia for suggesting that we contribute to the online resources of his outstanding publication..

When Jim contacted me about blogging for InvestmentNews he explained that he and his staff had observed a strong trend over the past year. With increasing frequency, those writing letters to the editor or posting comments online about articles published in IN addressed fiduciary matters in their remarks, even when the articles were not focused on fiduciary subjects.  Jim observed that fiduciary issues had apparently become the most talked-about subject among IN readers and he decided a blog would provide an ideal vehicle to productively promote these conversations.

This blog is supported by multiple bloggers from fi360 who address the legal, regulatory, and practical aspects of serving in a fiduciary capacity, as well as providing up-to-the-moment news and analysis of developments in the fiduciary space. This includes updates and commentary on the current push for a fiduciary standard of care to be enacted for all investment advice, as well as guidance on prudent investment practices for professionals seeking to better understand and fulfill the duties and responsibilities that come with being in this unique position of trust.

One of the great benefits of a blog is the ability for authors to interact with its audience and members of the audience to interact with each other. We hope you will contribute to the success of this blog by leaving your thoughts in the comments sections to individual posts or by emailing us at blog@fi360.com to let us know what we can do to improve or what subjects or questions you would like to see addressed in future blog posts.

We thank all of our readers who have made this blog such a success over the past year and a half and look forward to the opportunity to interact with an even larger and more diverse audience via InvestmentNews’ readership.

Thank you,

Blaine Aikin
CEO, fi360

Upcoming webinar: The converging worlds of brokers and advisors as fiduciaries under regulatory reform

As a practical matter, the worlds of brokers and advisors have intersected for decades. Many brokers provide some level of advice and many advisors incorporate sales concepts from the brokerage arena to improve business results. Moreover, dual registration is commonplace and allows brokers and advisors to be both as circumstances dictate, even if clients don’t understand when the hats change. But, given the high level of investor confusion and dramatically different regulatory structures and business models, the convergence of brokers and advisors in the marketplace has looked more like a collision than a harmonic union.

Join us for a free webinar on Thursday, September 3, 2009, 4-5 p.m. EDT and learn what "harmonization" really means to those on all sides of the debate and why reform does not have to mean homogenization, but a better alignment between the broker/suitability segment of the industry and the advisor/fiduciary segment.
The webinar will feature Blaine Aikin and Kristina Fausti addressing the confusion that has been caused by the interconnection of the worlds of advisors and brokers and how regulatory reform will clear that confusion and result in a greater range and quality of products available to all advisors, "safe harbor" type exemptions to ease the transition for advice-giving brokers, and the introduction of more fiduciary principles to the suitability standard.

To register for the event, click here. Space is limited, but a recording of the event will be made available on our Webinars page after the event.

You can download the presentation slides here. If you would like to submit any questions or topics you want to see addressed in the webinar, let us know in the comments below or send an email to resources@fi360.com.

New Article Competition entry: 401(k) Plans: the Lake Wobegon effect

Our first entry into the 2010 article competition has been posted. AIFA designee Roger Levy of Cambridge Financial Services Group in Greenwich, CT, authored the article "401(k) Plans: the Lake Wobegon effect."  The article argues that participant-direction has proven itself not to work. No matter how much more information and participant education is made available, the situation hasn't changed.  The solution, argues Roger, is in professionally managed plans, citing evidence that they have proven more successful in the market turmoil of the last year.  Roger also provides advice in converting to trustee-direction, such as the proper appointment of fiduciaries and changes to the investment policy statement. 

If you have any feedback on the article, submit it to resources@fi360.com or in the comments section below.

The winner of the article competition receives a $1,000 prize at our 2010 National Conference. For more information on the fi360 article competition, visit the article competition home page. 

Listen to the experts at fi360 this week

Blaine Aikin and Kristina Fausti will be both be speaking this week on regulatory issues, so we wanted to pass on information on how you can listen in.

Later this afternoon, from 3-4 p.m. EDT, Director of Legal and Regulatory Affairs Kristina Fausti will be giving her reactions to the Obama administration's financial reform proposal on a joint webinar from Investment Advisor and Wealth Manager magazines.  Also included in the panel are Brian Rubin of Sutherland law firm, Kate McBride of Wealth Manager magazine and Melanie Waddell of Investment Advisor magazine. 

UPDATE: The archived recording of the webinar can now be found here: https://www1.gotomeeting.com/register/477363008

Then on Sunday, CEO Blaine Aikin will be appearing on AIFA designee Gary Allen's radio program, Gary Allen on Business.  The program is broadcast from San Francisco and will be on from 9-10 a.m. PDT/12-1 p.m. EDT.  You can stream the program live at: http://radiotime.com/station/s_34231/KNBR_680.aspx. For more information on the show, Gary Allen's blog or to listen to archived shows, visit the show's home page: http://garyallenonbusinessknbr.ning.com/.

And, if you haven't already done so, make sure you check out our own webinar from earlier this month, The Promise and Prospect of a New Fiduciary Environment.  The webinar was also on the various regulatory reform proposals and the version fi360 would like to see put in place.  Also included is information on how you can contact your representatives and the various regulators to voice your opinion.

Our last day in Sewickley

 

(Fi360 Team members Kevin Haugh, Steve Rydzak and Jeff Chen prepping for the move)

Sorry for the slow down in the blog and Twitter over the last couple of days.  We are on our way out of Sewickley and things are slow with the move.  In fact, today is our last day at our home of the last six years.  Tomorrow is the move day and our offices will be closed.  You'll still be able to access our website, the Toolkits, Web-based programs, designee portal, etc., but for the most part will be unavailable for customer service.  If you need immediate assistance, please email the appropriate contact and we'll try to attend to you as soon as possible. 

Our new home is in Bridgeville, which is a southern suburb of Pittsburgh (Sewickley is to the north).  This move gives us more space for our current staff and for our continued growth.  It also includes better space for our production and storage needs (all of those Prudent Practices handbooks take up a lot of space).

For more information on the move and our new address, check out our contact page.  Thanks for your patience as we get through the physical move and for your support that has necessitated our growth to our third home over the last ten years.

We'll see you on Monday from Bridgeville!

Webinar follow up

Thank you to everyone who attended this afternoon's webinar. We hope you found it informative.  If you did not make it, make sure you go to our webinars page, where you can download the slides as a PDF and a recording of the session.

So now that we've expressed our support behind Aguilar's positions, we want to know what you think.

While we're focusing on those who provide investment advice to be brought under the fiduciary standard of care, others would say all brokers and other financial agents should be included as well.  Who do you think should be included?

And what about the regulatory authority? While we agree with Aguilar's position that the SEC is the most logical authority for that role, we know that others, including some of you out there, would argue for a self-regulatory organization, possibly even Finra or the Financial Planning Coalition as the regulator.  Why would that be preferable to the SEC? What other options should be considered?

Finally, the clock is ticking on having our voice heard. There are many organizations and associations out there with strong opinions and strong interests to protect.  We'll do what we can to advance our position and let you know how to do the same, but we're still interested in hearing your suggestions for how to better advocate for change. 

If you have opinions or suggestions on any of these topics, let us know in the comments section below.  Also, submit any questions you have to the comments or email resources@fi360.com and we'll answer as many as possible in upcoming blog posts.

* * * * *

Other follow up items related to the webinar:

• You can download our letter to the SEC from our advocacy page and find contact information for the SEC Commissioners and your elected representatives so that you can voice your support for Aguilar's or other positions.
• Attendance can be submitted for one hour of CE for your AIF/AIFA designation on your next renewal form.  Just indicate your attendance at the June 2 webinar.
• Visit www.fi360.com/tools for Toolkit demonstration webinars
• Visit www.fi360.com/training for an upcoming training schedule, including AIF and AIFA programs in San Francisco in July.

fi360 Conference and our one-year anniversary!

Hello from the fi360 Conference.  We kicked off this morning with opening remarks from Blaine, a general session from Fred Reish and the first round of breakout sessions.  This is our fifth annual conference and hopefully our best yet.  In addition to the conference activities, we also held an AIF Capstone program and an fi360 Toolkits Workshop in the previous few days here in Scottsdale. This picture is of our Tools Product Manager Dave Palascak doing some one-on-one interaction from the workshop:

 

Blaine's opening remarks were about the great opportunity we currently have to see a robust, ERISA-level fiduciary standard applied universally for all investment advice. The real danger is a watering-down effect as fiduciary levels of care are applied to the commercial standard and the two standards are "harmonized."  He then called on the conference attendees to work as advocates where they can, through public and private speaking, involvement in professional associations, and always providing their services to the highest level care.

We'll post updates as the conference goes on and we're also live-Twittering, so make sure you follow us on Twitter, and note the Twitter feed to the right of this posting.  We also have some attendees sending in their live Tweets, so make sure you check out BehaviorGap, Actium, and George Gay.  If you are here in Scottsdale and Tweeting, make sure to use the #fi360_09 hash tag so that we can find your updates and plug your Twitter account.

Finally, we'd like to point out that this is our one-year anniversary! It was day one of last year's conference that we publicly launched the blog.  We hope that we've gotten better at it over the last year and thank everyone for helping our readership consistently increase over that time.  We're also looking forward to our new hire Kristina Fausti (see our last post) getting into the swing of things as we expect her to be a valuable blogger for fi360.  

Welcoming a new team member to fi360: Kristina Fausti

We would like to welcome the newest team member to fi360, Kristina Fausti, Director of Legal and Regulatory Affairs.  Kristina's primary role will be to research, write, speak and otherwise represent fi360 on legislative and regulatory developments impacting investment fiduciaries.  She also will provide subject matter expertise to our training courses and the fi360 Toolkits, act as legal liaison to outside counsel and take on a compliance role.  Welcome to the team Kristina!

Kristina joins us after having served more than four years as special counsel in the Office of the Chief Counsel, Division of Trading at the U.S. Securities and Exchange Commission in D.C.  In her role, she provided formal and informal guidance to the public and other SEC offices and divisions on issues related to broker-dealer registration requirements under the Securities Exchange Act of 1934, and reviewed proposed rules and regulations affecting broker-dealer supervision and sales practices.

In our press release on her hiring, CEO Blaine Aikin had this to say, "Kristina brings us a depth of relevant knowledge and experience as we expand our company efforts to proactively impact the fiduciary environment for the benefit of investors.  Her addition provides a valuable resource to our team, our designee and subscriber member base, and the fiduciary community at large."

Kristina's move to Pittsburgh is also a homecoming for her, as she is a local who wanted to return to her roots.  She is currently living in the farm house where she grew up just north of our offices. 

The addition of this position should open up a number of opportunities for us to be more directly involved in the legal and regulatory conversations regarding fiduciary duties, as well as expand our offerings to designees and our advocacy efforts.  It is an exciting new addition that will promote creative growth at fi360.  Kristina will be attending our conference next week , so if you are attending (or still want to), make sure you say hello and welcome her to our community.

For more information about Kristina, visit our staff listing page, or email blog@fi360.com or email Kristina directly at kristina@fi360.com. 

Press Release: Partnership with Fiduciary Benchmarks

FIDUCIARY BENCHMARKS AND FIDUCIARY360 ANNOUNCE PARTNERSHIP

March 17, 2009 (Portland, OR and Pittsburgh, PA) – Fiduciary Benchmarks, Inc. (FBi), the retirement industry’s premier benchmarking organization, and Fiduciary360 (fi360), the global leader in fiduciary insights, today announced formation of a new partnership. The collaboration will offer fi360’s designees and analytical and reporting software subscribers discounts to all of FBi’s annual plan fee, service and success measure benchmarking via FBi’s comprehensive benchmarking reports.

"FBi is breaking new ground and providing a service that offers the opportunity for greater transparency and valuable, practical information that hasn’t been readily available,” says Blaine Aikin chief executive officer of fi360. “Access to this information complements our members’ ability to deliver a fiduciary standard of care.”

FBi is establishing the retirement industry’s largest database of non-proprietary plan data that is aggregated and analyzed to provide Financial Advisors, Consultants, Recordkeepers and the plan’s they serve with fee, service, and success measure benchmarking information, including:

• Complete fee transparency
• Fee comparison against a benchmark universe of plans
• Service comparison against a benchmark universe of plans
• Success measure comparison against a benchmark universe of plans
• Plan complexity and outsourcing benchmarking
• Best practices and fiduciary oversight benchmarking
• Satisfaction survey benchmarking

“Fi360 has aggregated the premier group of fiduciary-focused intermediaries so there were obvious synergies between our organizations,” says Tom Kmak, CEO of FBi. “As they enter plan data for benchmarking, the robustness of our database benefits from their contributions"

The retirement plan industry has more than doubled in the past 10 years, growing to 780,000 defined contribution plans with more than $2 trillion in assets. The industry’s rapid growth, which is projected to reach $15 trillion in assets by 2015, and the complexity of investment fee structures for defined contribution plans, has led to increased legislative and regulatory activity and a 250% rise in fiduciary insurance premiums since 2000

“Fi360’s designees and subscribers are already following best practices for investment fiduciaries and now can add complete fee, service and success measure benchmarking to their practices,” says Craig Rosenthal, FBi senior vice president, advisor sales & service.

In addition to partnering to offer benchmark reports to fi360 designees and tools subscribers, FBi CEO Tom Kmak will be speaking at the 2009 fi360 National Conference and the companies are reviewing additional potential collaborations including new product development, research and benchmarking training.

# # #

About Fiduciary Benchmarks
Fiduciary Benchmarks, Inc. (FBi) is the industry’s leading provider of comprehensive qualitative and quantitative benchmarking for defined contribution plans. Founding partners include Tom Kmak, former CEO of JPMorgan Retirement Plan Services, Ron Eisen, President of Investment Management Consultants, and Olena Berg Lacy, former Assistant Secretary of Labor and currently Director and Senior Advisor for Financial Engines. For more information about FBi, please visit www.fiduciarybenchmarks.com.