Compliance March 15, 2011

Distribution Advice Should Not be Prohibited, Group Says

The DC Plan Investment Council is advocating that advice to participants by a plan adviser at the time of a distributable event should not be a prohibited transaction.
Reported by

The Council submitted to the Department of Labor (DoL) a statement, “Position on Rollovers from Plan Assets,” urging the DoL to review rules and regulations that limit participant access to advice when the Council says they need the help most. The statement sites quantitative data articulating the benefits of advice, quoting studies by the ING Institute for Research, Charles Schwab and Company and EBRI.   

As an alternative to rules and regulations, it proposes professional standards for plan advisers who deliver advice to participants in client plans at the time of distribution.  

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Advisers to the plan are best placed to provide advice at the time of distribution because they know the participant and the plan better than anyone else, the Council says. For many participants, the plan adviser is the only adviser they have ever met in their career; the one who knows best their situation, facts and circumstances.   

“Professional retirement plan advisers could improve the retirement readiness of participants if they were able to help participants without constraint at the time of distribution” said Steve Dimitriou of Mayflower Advisors. He has been involved with the Council since its creation in May 2009 and was named the 2009 PLANSPONSOR Retirement Plan Adviser of the Year.

More information about the Council is at http://www.dcpicadvisors.com.  

The Markets March 15, 2011

Van Eck Launches Colombia ETF

Van Eck Global has launched Market Vectors Colombia ETF (COLX), designed for investors seeking direct, targeted exposure to Colombian equities.
Reported by

COLX seeks to replicate, before fees and expenses, the performance of the Market Vectors Colombia Index (MVCOLXTR), created by 4AssetManagement. MVCOLXTR is a “pure play” index that not only includes local companies domiciled and listed on the Colombian exchange, but also offshore companies that derive the majority of their assets in the country. 

As of March 10, 2011, approximately 74% of the equities in the Index were local Colombian companies, while the remainder was listed offshore. The comprehensive nature of the Index, combined with its weighting caps, leads to greater diversification by sector and market cap.  Its 27 holdings are made up of approximately 51% large-cap equities, 36% mid-cap equities, and 13% small-caps. As of March 10, the largest sector weightings were Financials (33%), Energy (30%), and Materials (17%).

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“Colombia’s commodity-based economy appears poised to experience growth in both trade and foreign direct investment,” said Allison Lovett, Vice President of Marketing at Van Eck Global. “And the merger of the Colombian stock exchange with Peru’s exchange may further strengthen the country’s position among regional capital markets.”

COLX carries a competitive net expense ratio of 0.75% and a gross expense ratio of 0.97%.

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