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401(k)
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Most Retirement Plans Are Breaking Labor Department Rules, And The Fines Are Enormous |
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Wednesday, February 22, 2012 14:45
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Tags: 401(k) No wonder a lot of 401(k) administrators dragged their heels to fight both greater fee transparency and greater fidicuary responsibility. The Labor Department has to hire hundreds of auditors just to keep up with infractions.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
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A full 70% of all plans that got audits in 2009 and 2010 were in noncompliance, earning an average of $450,000 apiece in fines.
In all, DOL recovered a staggering $1 billion in 2010 alone.
Most of the problems stem from bookkeeping errors and other oversights -- only 96 people associated with retirement plan offenses were charged on a criminal level in 2010 -- but these are exactly the types of error that third-party administrators make their money preventing.
Frequent mistakes the DOL auditors see: sluggish deposits, missed filing deadlines, failure to meet rank-and-file employee participation thresholds, and even outright mismatches between business and plan structure.
Plan lending remains a sore spot as well, but everyone in the industry recognizes that this is an area that most plan personnel find confusing.
Nonetheless, these are all preventable problems, and advisors who can prevent them can save the plans they work with a great deal of money -- not to mention market themselves as such.
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A "Final" Deadline For 401(k) Fee Transparency: July 1 |
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Friday, February 03, 2012 14:54
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Tags: 401(k) Retirement plan service providers have known that new fee disclosure rules were on the table for ages now, but the latest extension may actually be the last.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
DOL says July 1 is the drop-dead date for 401(k) plans to break out their fees in plain English.
This is roughly a year after the rule was originally set to go in effect.
Service providers have consistently balked, arguing that they don't have enough time.
At this point, can we really blame technology? Or is there some other reason they don't want plan participants to see exactly what they're paying for their nest eggs?
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Why Are The Eggheads At Dimensional Fund Advisors So Focused On The 401(k) Business Opportunity For Advisors? |
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Thursday, January 12, 2012 17:39
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Tags: 401(k) | marketing | niche Dimensional Fund Advisors has a track record of supporting best practices in investment management and grounding its solutions on academic research. DFA is embraced by many of the smartest advisors I know. So when DFA’s website is plastered with content about the opportunity for advisors in the 401(k) business, you want to pay attention.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
Apollo Lupescu, who heads DFA’s advisor 401(k) business, said in a recent article that advisors who want to get into the 401(k) advice business have two options: build their own solution or outsource. DFA has a way to enable advisors to outsource most of the operational, investment research, and administrative hassle of the 401(k) business while staying at the center of the relationship with a plan sponsor, and while limiting the fiduciary risk associated with advising plans.
.jpg) This story actually begins when Andrew Fox, CFP, of Fox Financial, who sent me a template email announcing that “recent regulatory changes and technological advancements have now made the time perfect for Fox Financial to start offering 401(k) plans to businesses of all sizes.” Fox’s email prompted me to ask him what he was doing. He introduced me Lupescu.
Lupescu, who holds a Ph.D. in economics, says a confluence of events have opened a window of opportunity for private wealth advisors to enter the 401(k) business. Basically, changes in rules at the Department of Labor on 401(k) advisors and the role of fiduciaries along with bloated fees charge by many large plan providers and new disclosure requirements make this a good time for advisors to look at the 401(k) business.
An article by Lupescu and another one featuring Robert Merton explain ideas driving DFA's 401(k) strategy. Merton is the School of Management Distinguished Professor of Finance at the Massachusetts Institute of Technology and University Professor Emeritus at Harvard University.
Incidentally, we’re making a change in our policy for distributing the slides at A4A webinars. You’ll need to be signed up as an A4A member to get the slides at these sessions. If you are not a member, please sign up at www.advisors4advisors.com.
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401(k) Administrators Beg For More Time On Fee Disclosure |
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Wednesday, December 21, 2011 17:31
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Tags: 401(k) The controversial move to force all 401(k) plans to clearly break out all fees may get delayed one more time.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
The American Society of Pension Plan Actuaries & Administrators and the Council of Independent 401(k) Recordkeepers are trade organizations for retirement plan service vendors.
They want the Labor Department to give their members more time to revamp their fee disclosure statements.
They say they only have three months to meet the deadline.
As it is, this process has dragged on for years, and the most recent extension came way back in July.
How long does it take?
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Making Connections: A Pipeline Of Leads Filled By LinkedIn |
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Tuesday, December 06, 2011 18:09
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It’s important for financial advisors to build leads, which boost business development. In this technology driven age, LinkedIn is an excellent tool for financial advisors to identify prospective clients and referral sources. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
LinkedIn was founded in 2002 by Reid Hoffman and today boasts over 100 million members in 200 countries making it the world’s largest professional networking website. Unlike other social networking sites, LinkedIn’s mission was to connect employers with potential job candidates and vice versa. Today, LinkedIn is the premier professional networking site for personal promotion, as well as business development.
LinkedIn offers many tactics that can be utilized by financial advisors to fill the pipeline of leads.By using the “advanced search” option, you can easily filter and narrow prospects in your targeted industry. The “advanced people search” has options to highlight keywords, names, locations and postal codes, as well as job titles, schools and companies. If individuals or businesses use certain keywords numerous times throughout their profile, those names should come up first on the search page.
For example, if CPAs are good referral sources for you, you can search for CPAs in your zip code and build your database of accountants. With LinkedIn’s Business, Business Plus or Executive paid accounts, you can search by company size, interests, years of experience and Fortune 1,000. Seniority level and function are in beta testing.
To further build the network and make quality connections with prospects, your invitation email should include a personal message explaining your intention and the benefit the person would receive by connecting with you.
While you can build a robust pipeline with FreeErisa and subscription databases, such as Judy Diamond and Larkspur, don’t neglect LinkedIn’s platform with increasingly better search capabilities, which can provide an important tool in the everlasting pursuit of leads.
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