Products March 8, 2016

America's Best 401k to Offer Payroll Solutions

The company has partnered with Heartland Payment Systems, Inc.
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Heartland Payment Systems, Inc. has been chosen by America’s Best 401k to provide payroll, payment processing and lending solutions for its small and midsize business clients.

In addition, Heartland will add America’s Best 401k solutions to its suite of payroll services and offer them to mutual payroll clients.

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America’s Best 401k offers 401(k) plan solutions for small and midsize businesses that combine strategic plan design, high-touch service and integrated asset-allocation technology with greatly reduced investment expenses. Heartland payroll processing solutions feature all-inclusive pricing guaranteed for three years, a web-based, self-service portal that employees can access anytime, anywhere, and paperless direct deposit and prepaid card options.

“We’re thrilled to partner with Heartland for the additional services they will offer our clients and prospects. Integrated payroll services are a fantastic addition to America’s Best 401k, as we strive to reduce our clients’ administrative tasks,” says Tom Zgainer, CEO and founder, America’s Best 401k.

Data & Research March 8, 2016

Many Advisers With Misconduct Records Are Reemployed

Researchers created a 15-year database of advisers from FINRA’s BrokerCheck.
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Creating a database of the disciplinary records of 1.2 million financial advisers from FINRA’s BrokerCheck database between 2005 and 2015, researchers found that in that period, 7% of advisers had misconduct records, and 50% of those with a misconduct record were fired.

Although this information is publicly available, unsophisticated retail investors do not know it exists, which could be why 44% of advisers with misconduct records are rehired within a year, and one-third of those with misconduct records are repeat offenders.

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These are the main findings of the report, “The Market for Financial Adviser Misconduct,” authored by Gregor Matvos and Amit Seru of the University of Chicago Booth School of Business and Mark Egan of the University of Minnesota Carlson School of Management. The database collected all consumer disputes, disciplinary events and financial matters from advisers’ disclosure statements during the 15-year period. The disciplinary events include civil, criminal and regulatory actions.

Advisers with misconduct records who find another job in the industry do not do so without cost, according to the researchers. They tend to move to less reputable firms, with a 10% reduction in compensation averaging $15,000. Additionally, according to the researchers, “firms that hired these advisers also have higher rates of prior misconduct themselves.”

While many firms have stellar records and “use their reputation to attract sophisticated consumers,” some firms purposely engage in misconduct and purposely “cater to” unsophisticated consumers, according to the paper. The researchers also found that “misconduct is concentrated in firms with retail customers and in counties with low education, elderly populations and high incomes.”

The researchers conclude that “the large presence of repeat offenders suggests that consumers could avoid a substantial amount of misconduct by avoiding advisers with misconduct records. Furthermore, this result implies that neither market forces nor regulators fully prevent such advisers from providing services in the future.”

The researchers say that the FINRA BrokerCheck should act as a market mechanism to “prevent and punish misconduct,” but since it does not, regulators should promote the FINRA BrokerCheck website to create “an increase in market transparency.”

The researchers contend that this is the first large-scale study to document the extent of misconduct among advisers. “The Market for Financial Adviser Misconduct” can be downloaded here.

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