Deals & People November 14, 2013

Towers Watson Adds Pension Risk Transfer Expert

Towers Watson has hired Edward Root as a senior pension risk transfer expert.
Reported by

Root will be based in the Stamford, Connecticut office, adding his perspective to the advising of plan sponsors on pension plan risk management strategies.

Prior to Towers Watson, Root was vice president and head of U.S. pensions at MetLife, where he had general management responsibility for its multibillion-dollar pension risk transfer annuities business. Before that, he was a senior vice president and actuary at Transamerica. Root began his professional career as a pension actuary at Towers Perrin.

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Root received a B.S. degree in mathematics from California State University at Sonoma and an M.B.A. in finance from the University of Southern California.

Towers Watson is a professional services company that helps organizations improve performance through effective people, risk and financial management.

Data & Research November 14, 2013

Advisers Strongly Oppose Fiduciary Update

More than nine in 10 financial advisers continue to oppose a pending Department of Labor (DOL) rule change expected to broaden the definition of “fiduciary.”
Reported by

Ninety-one percent of advisers in the Financial Services Institute’s (FSI) poll, “Financial Advisors Weigh in on Politics, the Economy, Taxes & More,” said they oppose the DOL’s plan to broaden the fiduciary definition (see “New Restrictions Loom for IRA Rollovers”). That’s a spike from the 72% of advisers who said they opposed the new definition in February 2012.  

A change in definition would likely lead to more prohibited transactions under the Employee Retirement Income Security Act (ERISA), which stipulates that fiduciary advisers must make all plan recommendations in participants’ best interest and limits opportunities for firms to profit from selling additional services.

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Other topics include the recent federal government shutdown and debt ceiling stalemate. When asked whether the shutdown and debt ceiling fight affected clients in a negative way, fewer than half (46%) said yes. A substantial majority of respondents (77%) believe that a short-term fix will be passed to avoid another shutdown early next year.

Advisers were split at 50% on whether work as a financial adviser increased because of problems–real or perceived–clients faced during the government shutdown and debt ceiling debate    

Just 1% of survey respondents said they think raising taxes should be considered as part of a grand bargain on the debt ceiling. Fifty-five percent favored cutting spending, and 42% said both raising taxes and cutting spending are necessary.

“Financial advisers are clearly paying attention to policy and politics as Washington becomes more and more a part of their planning for their clients,” said Dale Brown, president and CEO of FSI. 

Looking to the wider economy, more than half the advisers (57%) said they expected growth to stay flat in 2014, while 59% expect neutral performance from the equities markets.

Another telling figure from the poll shows only 57% of financial advisers have a succession plan finalized to pass along practice management functions once they retire.

FSI conducted the poll in-house with input from 2,528 financial advisers in early November. More on the survey results and FSI is available here.

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