Here’s something you don’t always see, but maybe you should.
Tag "DOL"
This has long been demanded of fiduciaries. Nearly two centuries ago in Harvard College v. Amory, the Massachusetts court promulgated what has become known as the “prudent man rule.”
Today, the understanding of conflict-of-interest fees goes well beyond plan sponsors. Individual investors also understand how they can act as a better fiduciary for their own personal investments.
All these strategies can be employed today and have proven themselves effective. It’s unclear that disclosing projected retirement income will provide the kind of incentive that will work.
If a fiduciary must vote proxies, following the DOL’s guidance may represent the most practical alternative.
ESG isn’t going away. There’s no way of telling if it’s a mood ring or a diamond ring. One thing is eminently clear: ESG is a product that people want right now. This complicates life for the retirement plan fiduciary.
The most pertinent issue may not be the fiduciary imperative, but the marketing imperative. This makes things extremely difficult for the 401k plan sponsor who may sometimes confuse which has priority. Here’s an example of why a plan sponsor might be concerned.
“That is one of the key weaknesses of the SEC’s Reg BI. It allows brokers to claim they are working in an investor’s best interest without being held to a legal duty of loyalty”
Although we’ve seen a broader acceptance of using an IPS, their use is by no means universal and particularly lacking among smaller employers. Perhaps there’s a realization that, if you don’t get the IPS right, you’ll only increase your liability.
“Surveys show about half of investors don’t know how much they’re paying for advice, and about one in six think they pay nothing.”
