Dog Days
While you may be relaxing at the beach or on vacation, in this issue, you can get up to speed quickly with a market that has not slowed down a bit. Our cover story in this issue, “Exit Signs” (page 28), examines what advisers should do during a wave of recordkeeping consolidation—a trend that picked up steam last winter and continues to have an impact. The article discusses the issues that are different in this most recent wave, and offers advisers some advice about what they can do, and what they should ask, if the recordkeeper(s) you work with get swept up in the tide.
Speaking of change, in the last issue, our cover story touched on what some wirehouse and broker/dealer firms are doing to allow advisers to change their revenue models. UBS Financial Services is one such firm and we spoke to Ed O’Connor, Head of Retirement Consulting Services, about a new program that allows its advisers to serve as co-fiduciaries (page 24).
Slow Starts?
Regardless of your stance on the wisdom of being a fiduciary, when the Pension Protection Act was finalized in August 2006, the role of the new fiduciary adviser seemed a grand idea. However, it has been slow to take root—see why not, and learn what has been going on in the industry around those rules in “Help Wanted” (page 52).
Another area that has been slow to take root—but shows promising signs—are annuities, which, despite past negative connotations, are experiencing a resurgence in interest and sales. In “As Good as Annuity” (page 44), we discuss some of those new options, what advisers should know about them, and some new rules the Department of Labor and FINRA have set out regarding these products.
Our series on benchmarking investments covered managed accounts in the January-February issue, balanced funds in the March-April issue, and target-date funds in our last issue. In this issue, we conclude our series on benchmarking with a look at an option that has been anything but slow to start—target-risk, or lifestyle funds—in “A Calculated Risk” (page 48). You also will find some valuable insights on investment options in “Reading between the Lines,” as Quana Jew reviews the technical corrections to the qualified default investment alternative regulations (page 63).
“Correction Appended” (page 56) examines a new way for deferred compensation plans to voluntarily correct those inevitable administrative mistakes—and that can help you keep your clients out of hot water with the Internal Revenue Service (IRS). Advisers who work with 403(b) plans know that those programs soon must be in compliance with new IRS regulations—and must have a written plan document in place. In order to help plans comply with the new requirement, many providers are offering sample plan documents, or plan document generators. This issue’s Road Test will help you navigate some of the new options you can recommend to clients (page 12).
Client Service
Also in this issue, guest columnist Barbara Delaney, founder of FFoA, the 2008 PLANSPONSOR Retirement Plan Team of the Year, shares her thoughts on advisers and reasonableness of fees in “The Eternal Question” on page 59. Steff Chalk, in his column, also discusses fees and warns advisers about the impact of a new full fee-disclosure environment in “Tidal Pulls” on page 62. Meanwhile, Nevin Adams highlights the importance of getting “The Rest of the Story” on page 64.
I hope this issue gives you some things to think about as we head into the fall and open enrollment, employee meetings, and anticipated regulatory action. Enjoy the rest of your summer!