Compliance April 14, 2011

Administrator Busted for Bogus Retirement Plan Scam

A federal court has permanently barred William Alexander from selling or administering pension plans or employee welfare-benefit plans.
Reported by

Through his two companies, Retirement Plan Services Inc. and Lyons Pensions Inc., the Justice Department alleged that Alexander helped small-business owners create bogus pension plans so they could re-characterize their salaries as pension-plan contributions.Alexander then allegedly caused the sham contributions to be refunded to his customers through fake loans from the plans.     

According to the announcement, Alexander advised his customers that they could deduct the purported contributions in order to reduce or eliminate their federal income taxes.  The complaint also said that Alexander fraudulently misrepresented his customers’ non-deductible personal expenses as deductible pension-plan contributions.     

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The government alleged that Alexander’s promotion of these schemes cost the government at least $30 million.  

The court’s order, to which Alexander and his companies consented, also prohibits Alexander from preparing federal tax returns for others for a fee or representing others before the Internal Revenue Service.
Data & Research April 14, 2011

Low Fees Not a Priority When Shopping for Adviser

Being knowledgeable and trustworthy are the most important factors people consider when searching for a financial adviser, the First Command Financial Behaviors Index found.   
Reported by

In a recent survey of middle-class Americans who work with a financial planner, three quarters of respondents picked “knowledgeable” and “trustworthy” as the most important attributes they seek in a planner. “Honest” came in third at 70%.

The First Command Financial Behaviors Index is conducted monthly to assess financial behaviors and attitudes among Americans. This month’s survey found that the top ten attributes consumers look for in a financial adviser are:

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

  • Knowledgeable (75%)
  • Trustworthy (74%)
  • Honest (70%)
  • Many years of experience (59%)
  • Willing to listen (52%)
  • Positive word of mouth or referral (51%)
  • Confident (48%)
  • Personal Relationship (46%)
  • Understanding (44%)
  • Patient (34%)

Notably, the cost of advisory services did not make the top ten. Just three out of ten respondents picked “low price for services” as the most important attribute to look for in an adviser.

“Financial planning is not a commodity that consumers shop for based on price,” said Scott Spiker, CEO of First Command Financial Services. “Rather, it is a profession built on personal relationships with people you trust. Consumers are willing to pay for planning services when they feel the planner has the technical know-how and the moral fiber to help them pursue their long-term financial goals and lifetime dreams.”

«