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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 10/26/12

October 29
00:06 2012

Welcome to Trending Topics. Each Monday, we’ll give you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks. If you smile when you read these entertaining snippets, well, that’s the idea. If you think we’re missing something important, then please let us know. But, note this well, we avoid press releases masquerading as news stories (even though they might be reported by journalists) as well as mass media pabulum that merely mouths investment myths and mistakes.

FiduciaryNews Lead Story:
Experts: 3 Common Investor Mistakes All Retail and 401k Investors Should Avoid,” (, October 23, 2012). We can all learn from our own mistakes, but it’s a lot less costly to learn from the mistakes of others.

Compliance – Common Sense:
With the twin peaks of election coverage and Sandy coverage sucking the air out of normal news, we find an unusual dirth of good content this week. Here’s a great how-to piece of the likes we haven’t seen in a while.
12 best ways to avoid a DOL audit,” (BenefitsPro, October 24, 2012) The list includes and additional list of four reasons you are more likely to be audited. Print it out. Tack it up on the HR manager’s door.

Fiduciary – All Bets Now Final, the Wheel is Spinning:
Here’s where the election meets the industry. Be prepared for more stories, especially if Obama loses.
How to Change the Regulatory Debate – Before it’s Too Late,” (Advisor Perspectives, October 23, 2012) Bob Veres raises an interesting point. Much of the regulatory debate has been on how often the SEC audits advisers. A better question would be: how effective are those audits. They’re good at catching uncrossed t’s and undotted i’s, but they’re not too good at catching Ponzi schemers. If you think that’s good, you should read what he writes next about the fiduciary standard. Looks like ol’ Bob is bucking to be considered as the next Chair of the SEC.
SEC’s Schapiro Expects Fiduciary Standard Proposal in 2013,” (AdvisorOne, October 23, 2012) She speaks with a confidence far beyond her demonstrated abilities.
Principles vs. Rules: The Fiduciary Debate in a Nutshell,” (AdvisorOne, October 25, 2012) And this is because Dodd-Frank was written as a convoluted compromise between the RIA industry and the brokerage industry.
The State of Investor Trust, or Distrust, Fiduciary and the CFP Board,” (AdvisorOne, October 25, 2012) Knut Rostad joins Ron Rhoades in taking the CFP Board to task for an arbitrarily insane ruling.

Investments – It’s So Crazy, It Just Might Work:
File this under “don’t laugh ‘til you try it.” Sometime winning doesn’t mean hitting a target, it means not missing. If you know what makes people miss, it makes it easier not to miss.
Dealing with investor irrationality,” (BenefitsPro, October 24, 2012) Investors – whether the retail kind or the 401k kind – make mistakes, and these mistakes come down to one word: “Emotion.” Here’s a primer for 401k plan sponsors on how to spot the problem and how best to address it.

Major Plan Sponsor Moves and News:
What are other plan sponsors and fiduciaries doing with their plans? And how are participants responding? The latest in legal proceedings involving plan sponsors and fiduciaries.
Most 401k participants not saving enough,” (BenefitsPro, October 19, 2012)
401k plan perks grow, but savings still lag,” (MarketWatch, October 20, 2012)
Middle Class Agrees They Are Responsible for Funding Retirement,” (, October 23, 2012)
More Americans tap retirement funds. Is that OK?” (Christian Science Monitor, October 23, 2012)
Take the choice away, increase the success,” (BenefitsPro, October 25, 2012)
Cheer up! Your 401k is roaring back,” (USA Today, October 25, 2012)

Wisdom from Some of Our Favorite Blogs:
fi360 Blog: Fiduciary Links: A new retirement withdrawal strategy and a look at annuitiesThe Chicago Financial Planner: Mutual Funds – Are “Family Values” Important?Scholarly Financial Planner: Will the CFP Board Move the Ball Forward, or Stall Progress Toward a True Profession?The Chicago Financial Planner: Friday Finance Links October 26, 2012

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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