The Apple Doesn’t Fall Far from the Tree

Americans whose parents set good financial examples are more likely to be among the 62% of Americans who have a financial plan and feel confident in their financial future, a new Genworth survey finds. One surprise in the results: Younger Americans are taking steps early on to plan for their financial futures and are just as likely as other age groups to have a financial plan.   Read More

RIA Mergers Expected to Rise

Schwab Advisor Services reports an increase in the size of RIA deals in 2012, while the number of deals decreased. The total value of RIA deals increased from $43.9 billion in 2011 to $58.8 billion last year, but the number of deals dropped — from 57 to 45 — led by national firms like Hightower, Focus Financial and United Capital. Some experts are predicting more activity in 2013, as the overall sector grows and many principals deal with growth and succession issues.   Read More

Moving Target

Trying to figure out how much money an individual or couple needs to live on in retirement is, to put it mildly, a complicated business. As advisors well know, it depends on a range of factors, including the age at which the individual retires, where they live, how they live, marital status and health. It can also be impacted by the markets, both before and after retirement.   Read More

Great Recession Causes Small Businesses to Pull Back on Benefits

Because of the Great Recession, fewer small employers are likely to offer benefits to their employees. According to a LIMRA study of 754 firms with fewer than 100 employees, only 47% indicated that they offered benefits — the lowest level in the past 20 years. With 98% of businesses considered “small” (representing 35% of the workforce, according to the U.S. Census bureau) and a sector that many economists regard as the engine of growth, this decline is significant.   Read More

Will Harkin’s Retirement Give Legs to his ‘USA Retirement Funds’ Idea?

With Sen. Tom Harkin (D-Iowa) announcing his intent to retire when his term expires next year, will his proposals to reform the nation’s retirement system be more likely to pass as he works hard on his legacy, or will they have less force behind them? As chairman of the powerful Health, Education, Labor and Pensions Committee, Harkin certainly has the platform. But will he get the support he needs to fund and pass a bill?   Read More

Are You Acting as a Fiduciary and Don’t Know it?

While it may be a marketing advantage to be a named fiduciary, many advisors aren’t permitted to do so, and there are instances where it doesn’t make sense. The law firm Lewis and Roca lays out guidelines on which activities make an advisor a fiduciary and how advisors can avoid liability if they desire. The definition is certainly in flux — the DOL plans to try to change the definition this year.   Read More

Social Media: Opportunity or Regulatory Nightmare?

On the one hand, broker dealers and RIAs have to embrace social media to attract and keep advisors; on the other hand, they need to comply with what some view as outdated regulations that prohibit most of the advisors’ activities. As social media sites like LinkedIn (the most popular site for business networking) introduce new features like endorsements, firms are scrambling to keep up.   Read More

Morningstar: TDFs Did Well in 2012

While the Wall Street Journal took a shot at TDFs this week, especially regarding the 2015 funds, Morningstar has a contrary view, noting that overall the category performed well — even the 2015 vintage. The highest-performing category was the 2035 sleeve, with a 14.7% return; the top fund was JP Morgan SmartRetirement 2045 at 18.1%.   Read More

Leakage Issue Leads Some to Question DC System

Picking up on the HelloWallet study showing how participants are tapping their 401(k) plans to pay bills, Time magazine this week raised the question of the effectiveness of the system. Though the concerns are real — with one quarter of workers planning to use their 401(k) plans for current expenses and an estimated $70 billion in leakage in 2010 — questioning a system that has attracted so many people and so much assets seems like throwing out the baby with the bath water.   Read More

Advisor Due Diligence Checklist

Experienced plan advisor Trish Brambley outlines the 10 things plan sponsors should consider when looking for a new plan advisor. Having a checklist from an impartial third party can be a helpful tool to focus prospects on the right issues — or even get them off the dime and take action.   Read More

Freedom From Choice

You may remember little else about the 1989 film “Field of Dreams,” but odds are you’ve invoked a version of what is probably its most famous line: “If you build it, he will come.” Unfortunately, for most retirement plan participants, building retirement savings is more complicated than constructing a baseball diamond in the middle of an Iowa cornfield.   Read More