Fi360 '10 investment advice session
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Transcript of Fi360 '10 investment advice session
401(k) Participant Advice: How to
Protect Your Plan Sponsors and
Yourself
Managing the Fiduciary Risk of Individual Advice
Legislative/Regulatory Overview
The History of Advice
„01 SunAmerica Opinion
PPA Fiduciary Adviser
January „09 DoL Opinion
February „10 DoL
Restatement
Jason Roberts, Partner:
Reish and Reicher
Advice in Practice
Managing Risk in Your Practice and for Plan Sponsors
Managing Risk In Your Practice
Is It Real or a Myth?Mike DiCenso, AIF, National Practice Leader: Gallagher Retirement Services
Total ERISA Plan
Settlements in „08 by
Category
DoL Monetary Recovery
in ERISA Plans „09
Recent Lawsuits
Against Advisors
Steps to Manage Risks
Amount Spent Worldwide On
A. Home Furnishings
B. Cell Phones
C. Take-out Coffee
D. Fine Art
Countries ranked in descending order based
on:
A. Per Capita Car
Ownership
B. Hours spent
reading annually
C. Home Square
Footage
D. Avg Weekly
(gov‟t) retirement
benefit
Metropolitan areas ranked by:
A. 1-yr decline in median home price
B. 3-yr decline in newspaper circulation
C. 5-yr decline in tourism
D. 10-yr decline in motor vehicle fatalities
Who is #61727-054
Bernie Madoff
This is why making sure you are acting in an ethical
manner and capacity as a consultant and/ or
Fiduciary is so important
Dollars Spent On
A. Bank Bailouts
B. Senate Earmarks
C. ERISA Settlements
D. Grande Lattes
What does this number Represent:
$1,3000,000,000
Amount of DoL Monetary Recovery in 2009 through:
Voluntary Compliance Programs
Plan Assets Restored
Prohibited Transaction Corrections
Types of Litigation
Source: Pension Litigation Data.com, ERISA Litigation Study , April 2009
3%
3%
5%
8%
10%
13%
13%
18%
19%
21%
22%
22%
24%
29%
29%
32%
37%
55%
59%
61%
62%
65%
69%
69%
70%
75%100%
0% 20% 40% 60% 80% 100%
Statute of Limitation
Withdrawal Liability
Top Hat Plan
Duty to Diversify
Discrimination
ESOPs
Preemption
Personal Liability
Party of Interest
Failure to Monitor
Duty to Disclose
Investment Procedures
Prohibited Transactions
Conflict of Interest
Two Hat Doctrine
Self Dealing
Material …
Exclusive Purpose
Contributions
Standard of Review
Loyalty
Interference with Benefits
Prudent Man Standard
Prudent Man
Remedies
Adherence to Plan …
Breach of Fiduciary Duty
Percentage of Cases
Managing Risk for Plan Sponsors
Managing Risk for Plan
Sponsors
Chad Griffeth, AIF, Co-Founder and President, BeManaged
What are the Risks for
Plan Sponsors
What the “F” Word
Means to Plan
Sponsors
Types of Fiduciaries
The Regs
The Fiduciary Safe
Harbor
Revenue and Cost Considerations
Motivation for providing
participant advice –
In-house v Outsource
Compensation Model
Impact on Your Cost
Structure
Things to keep in mind
Evaluation Method
Prohibited Transactions
Scott Holsopple, AIF,
President of Smart401k
Outsourcing Participant Advice
Should You or a Third Party Take That Risk?
Outsourcing Options – Who Should Take
the Risk – You or a Third Party?
Outsourcing Advice to
Mitigate Risk
Risks v Benefits
Must consider ability to
manage risks inherent
to various provisions
required to delivery safe
harbor and avoid
prohibited transactions
if with B/D
Jason Roberts, Partner:
Reish and Reicher
Smart401k Overview
Independent Investment
Adviser
Acknowledged Fiduciary
Solely focused on
participant advice
Advice & Managed
Portfolios
Unlimited access to team
of IARs
Targeted communications
& education program,
GAP analysis
Scott Holsopple, AIF,
President of Smart401k
BeManaged Overview
Independent, Unbundled Third Party 401(k) Advice and Account Mgmt Solution – 100% Focused
Participant IPS, ongoing advice/mgmt, customized updates, and Personal Annual Review
PPA Fiduciary Adviser Safe Harbor
Available to deliver direct or as “advice back office” for advisors
Chad Griffeth, AIF, Co-Founder|President, BeManaged
Q & A
Managing Risk In Your
Practice and For Plan
Sponsors
Outsourcing Questions
Contact Information
Jason Roberts, Esq.,
Reish & Reicher
(310) 478-5656
Mike DiCenso, AIF,
AJ Gallagher
Retirement Services
(630) 285-4093
Scott Holsopple,
Smart401k [email protected]
(913) 744-3378
Chad Griffeth, AIF
BeManaged [email protected]
(616) 871-0751
