12.12.2018 06.53 UTC

In the absence of new regulatory support, employers need to use their power in the market to protect participants from conflicted service models.

The (Financial) Empires Strike Back

The (Financial) Empires Strike Back

Initiatives to provide participants with protection from conflicted service models frequently meet with resistance from…the financial industry. What can employers do?

Government initiatives aimed at protecting retirement plan participants from conflicted advice are often resisted -- and occasionally derailed -- by the financial services industry. Employers must understand that regulatory agencies are constrained and, rather than wait for regulatory protections employers must understand that they are in the best position to protect participants.

10.05.2018 11.30 UTC

Financial firms have both the opportunity and the financial motivation to move customers from employer-sponsored plans to individual products, such as retail managed accounts and annuities. An investigation of Wells Fargo bank may disclose whether the bank succumbed to the temptation.

Et Tu, Wells Fargo?

Et Tu, Wells Fargo?

An investigation does not mean there was any wrongdoing by Wells Fargo.

Wells Fargo bank is reportedly under investigation for practices in the bank’s retirement plan division. The investigation apparently focuses on practices that may have been intended to move clients from employer-sponsored plans into more expensive individual retirement accounts when they leave their jobs. If these reports are accurate it may help shine a light on industry practices that contribute to plan “leakage.”

19.03.2018 09.00 UTC

A new court decision could give the Administration an opportunity to completely withdraw the regulations expanding ERISA’s definition of fiduciary and limit the ability to expand the scope of ERISA’s fiduciary protections in the future.

Court of Appeals Strikes Down Fiduciary Rule

Court of Appeals Strikes Down Fiduciary Rule

The U.S. Court of Appeals for the Fifth Circuit has issued an opinion striking down the DOL’s new fiduciary rule. The decision will add more (unwelcome) uncertainty.

On March 15 the U.S. Court of Appeals for the Fifth Circuit struck down the DOL’s new fiduciary rule. The decision, in very sweeping terms, concluded that the DOL did not have the regulatory authority to expand the previous definition of “fiduciary” contained in 1975 regulations. The breadth of the Court’s ruling, if upheld, makes it virtually impossible for the DOL to somehow modify the fiduciary proposal or to issue new fiduciary rules.