Products September 29, 2009

BrightScope Unveils Adviser Service

The 401(k) ratings and analytics firm BrightScope launched a service to help advisers and consultants find plans that need their help.

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BrightScope is a service that allows anyone to look up 401(k) plan data, which is gleaned from public sources such as Form 5500s and directly from plan sponsors. In July, the firm launched an offering for plan sponsors to compare their plans against a group of similar companies (see “BrightScope Launches 401k Plan Management Dashboard”).

Now the firm is marketing to advisers with Advisor Central 1.0, an interface that enables advisers to search by plan design and investment criteria among more than 12,000 plan evaluations to find plan sponsor clients in need of their services. BrightScope said the tool allows advisers to quickly identify plans to fit a target market, and to find and address critical pain points for plan sponsors.

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Furthermore, BrightScope said its search and sort capabilities designed to save advisers time.

More information is available at www.brightscope.com.

Data & Research September 29, 2009

Investors Turn to Advisers for Roth Conversion Help

While many investors still do not understand the features of a Roth IRA or know about the conversion opportunity just months away, most said they would look to their financial adviser or account for help, according to a Fidelity survey.

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Fifty-one percent of respondents indicated they would look to their financial adviser or accountant for information on whether a Roth IRA is right for them, while 35% would seek help from a representative of their financial institution, and 32% would use online resources, according to a Fidelity release of the results.

Fidelity found 88% of survey respondents are unaware that beginning January 1, income limits are being lifted for investors who want to covert non-Roth retirement assets into a Roth IRA. More than a quarter of investors (28%) answered incorrectly when asked if contributions to a Roth IRA are tax-deductible, as did 20% when asked if investment gains and income are tax free.

Nearly a third of respondents (32%) did not know if Roth IRA assets can be withdrawn tax-free after age 59 ½, and two-thirds did not know if withdrawals need to be made starting at age 70 ½. The majority of respondents also did not know what Roth IRA assets can be used for.

More than half (55%) of investors surveyed said they are willing to investigate a Roth IRA conversion for a 401(k) left with a former employer or other IRA. Lack of understanding was the number one barrier to conversion cited by respondents, Fidelity said.

Approximately one-third of investors indicated they do not understand a Roth IRA conversion’s tax implications (34%) or the tax structure of a Roth IRA itself (30%). Nearly a third (30%) said their balances are too small for a conversion or they lack sufficient funds (27%) to cover the conversion tax costs. One in five (20%) do not believe a Roth IRA fits their needs.

Only 7% of surveyed investors said they plan to convert to a Roth IRA.

Fidelity offers information to help investors in their analysis of Roth IRAs at www.fidelity.com/rothpov.

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