Identity Crisis
It can be tough to schedule a vacation around publication schedules and conferences but, months ago, I planned a vacation and set my sights on California. However, as the trip neared, the news was full of warnings about air quality and stories of massive wildfires in the area. In fact, at first, I was not even sure that the hotel where I had planned to stay would be open. So much for thoughtful planning.
Our cover story this month discusses the mistakes advisers sometimes make when choosing a broker/dealer or affiliation partner—despite careful consideration of what the issues appear to be ahead of that decision. What can sometimes be the most crucial decision is not easily made. Let’s face it: What one firm offers to firms it owns might be different from those received by member firms. One company might purchase individual adviser firms and take over all branding, while another operates behind the curtain. Add to that the reality that, while things are in “courtship mode,’ everyone is on their best behavior. If you are having a hard time deciphering what choice might be best for you, check out “Mistake in Identity.”
Whatever your affiliation, sooner or later every adviser is introduced—sometimes painfully—to the strictures of the compliance group. In “Murky Waters,” advisers share some of their best practices in working with compliance, ways in which the group has been somewhat of a headache, and ways in which the compliance department has helped advisers (and their firms) not only stay out of trouble, but also do their job better. Unfortunately—but perhaps not surprisingly—despite our best efforts to bring you the other side, no one from compliance at any firm we contacted was willing to go on the record. Perhaps this month’s coverage will encourage movement on that front. (The door is still open to any compliance area interested in speaking with us.)
Investment menus of retirement plans have changed over the years, most notably with the introduction of asset allocation fund suites, in addition to the traditional fund lineup. As part of a survey of advisers conducted this summer, we asked you about your favorite fund families, specific funds, ideal investment lineups, and how you select funds. Do you share the same tendencies and preferences as the general adviser audience? Check out “The Right Pieces,” to find out.
Also with an investment focus, our series of retirement income articles continues with coverage about a handful of investment options that integrate an annuity contract’s income guarantee within a defined contribution retirement plan. Yes, there are still only a handful of choices, yes, the take-up rate hasn’t (yet) taken off, and yes, we still lack a true benchmark or means of comparison, but these are the “early days,” and it seems fair to say that the innovation in this space is just beginning. We discuss what these products are, who is offering them, and what you (and your plan sponsor clients) should be considering in “The Inside Story.”
When it comes to considering the most important document associated with a defined contribution plan, after the plan document itself, most advisers cite the investment policy statement, or IPS. In “Statement of Purpose” advisers and providers share some best practices in implementing and maintaining an IPS—important skills to have, because this is clearly a role where plan sponsors expect their adviser to be front and center.
Speaking of documents, the Department of Labor recently finished its three-part disclosure regulatory package, issuing proposed participant disclosure regulations, expected to be in effect next year—a potentially scary proposition for many. In “Writing a Tell- All,” we get some industry response to those regulations, and in Fiduciary Fitness, Quana Jew details some of the specifics of those proposed regulations.
The micro-plan market continues to offer a wealth of opportunities for advisers. In this issue, “Best of Both Worlds” examines the growing popularity of cash balance plan designs in that market. At a time when traditional defined benefit plans are on the decline, cash balance plans are, by most accounts, thriving and offering a wealth of new opportunities for advisers to add a valuable sales tool to their practices.
For those of you reading while attending the PLANADVISER National Conference, thanks for joining us. If you were not able to attend the conference, stay tuned to the next issue of PLANADVISER for a special conference recap. Enjoy!