Last Week’s Top 5 Posts on NAPA Net

Last week’s top five most-read posts on NAPA Net reflected keen interest in the phasing out of out-of-office emails; comments from Phyllis Borzi on DOL’s fiduciary rule, MEPs and advisor fees; the CFP website’s shift in reporting compensation models; FINRA’s approval of broker bonus disclosure rules; and our reader poll on plans that have recently changed broker dealers.   Read More

Two Top Wire Houses Weigh in on CFP Compensation Models

Fallout over the way CFPs report their compensation on the CFP website continues, as two wire houses instructed their advisors not to use fee only. Both Morgan Stanley and Merrill Lynch ordered immediate action in a note sent to all reps. Morgan has 1,580 CFPs and Merrill has 1,560; the Wall Street Journal found that 181 Morgan and 125 Merrill reps had been listed as fee only.
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Fidelity Changes TDF Philosophy

Business reasons and changing market dynamics have caused Fidelity to get more aggressive in the equity allocation for their estimated $175 billion in TDF funds. RIABiz reporter Brooke Southall outlines the reasons why Fidelity may be making these changes, including research establishing that investors are more willing to accept risk and the fact that they are living longer and investing sooner.   Read More

LPL Takes on Participant Advice, Blind Squirrel Conundrum

At this past weekend’s LPL Retirement Partner Group meeting, 350 plan advisors gathered in Colorado Springs, including many of the 105 advisors recruited in 2013. Bill Chetney, SVP and group leader, said that while advisors have changed the DC and retirement market, there’s a long way to go. Chetney told the group that helping participants manage their retirement portfolio to and through retirement is the next and perhaps most daunting challenge.   Read More

What’s in a (Plan) Name?

“What’s in a name? That which we call a rose by any other name would smell as sweet.” In Shakespeare’s timeless love story, Juliet’s romantic plea to Romeo to relinquish his Montague family name was so convincing that he responded, “Henceforth I never will be Romeo.” In one of the most successful sales pitches ever, Juliet convinced Romeo that the names of things actually do not matter. Let’s think about this in the context of retirement plans.   Read More

What are the Top ETFs in 401(k) Plans?

As the debate continues to rage over whether ETFs will become popular in 401(k) plans, Brightscope has released a list of the most popular funds. Vanguard’s Total Bond Market remained at the top of the list, even as many are fleeing bonds in anticipation of rising interest rates. And the SPDR S&P 500 jumped to the second spot from number 13 as people try to ride gains in the stock market.   Read More

Detroit Spent Billions on Undisclosed Excess Payments

News about Detroit’s pension plan shortfalls only gets worse. A new report by the New York Times indicates that excess payments of $2.3 billion might have been paid to retirees and active workers over a 23-year period from 1985-2005. Bonuses were paid to retirees; supplemental payments were made to active workers; and cash was paid to families of deceased workers before they were eligible.   Read More

CFP Website Resets Compensation Models for all Planners

There’s a huge controversy brewing in the world of fee-only planners in the wake of the CFP Board’s decision to reset compensation models for all planners on their website to “none provided.” An email sent to all CFP holders last week directed designees to reread the policy about fee-only standards and then select the appropriate compensation model.   Read More

Online Advice Firms Face Difficult Future

An estimated 130 online financial advisory services have launched since the Great Recession — many in the last two years — but these firms are struggling to gain traction and achieve profitability. While they target the emerging wealthy market (investors with $50,000-$250,000), accounts tend to be smaller. And competition is driving prices down, with some predicting consolidation as early pioneers end up face down with arrows in their backs.   Read More

A ‘Win-Win-Win’ for Retirement

In a special report for NAPA Net, Paul R. Samuelson and Warren Cormier note that approaches to retirement readiness in the DC industry have largely been focused on the accumulation phase. Advisors specifically have been striving to optimize alpha (given risk aversion) through good allocation and product selection during accumulation. However, the opportunity for advisors to increase their “alpha” by helping employees squeeze out greater retirement income with the same assets during decumulation is rarely taken.   Read More

You’re ‘Out-of-Office’? Really?

Commenting on what he calls the biggest inside joke that almost everyone has caught on to, advisor Alex Murguia officially pronounced the death of automatic “out-of-office” email responses. Here’s what people really think when they get your out-of-office response:   Read More

Should a DC Plan Have Two Committees?

Should your clients have separate committees — one focused on fiduciary matters like investment and provider selection and monitoring, and the other focused on so-called settlor functions like plan design? This question was discussed recently by a panel of experts at the PSCA’s 66th annual conference.   Read More

Stanford Offers Retirement Education Program for Participants

Think that DC plan participant education is dead? Stanford Graduate School of Business professor Joshua Rauh thinks otherwise. He’s teaching an eight-week online course about the fundamentals of retirement plan investing for private as well as public pension plans. Rauh’s course is intended to help students make informed decisions about their portfolios with strategies to improve asset allocation. It will also include guest lecturers addressing public policy issues affecting the retirement industry.   Read More