Irwin Stein

The most fundamental questions pertaining to expert counsel are not addressed by the DOL's FAQs: (1) treatment of trade execution as a cost center to be minimized in the client's best interests, (2) retooling of product menus to (a) streamline cost and (b) facilitate real time client holdings data necessary for continuous, comprehensive counsel of fiduciary duty and (3) adoption of prudent process (asset/liability study, investment policy, portfolio construction, performance monitor) authenticated back to objective fiduciary criteria (statute, case law, regulatory opinion letters) which put "financial services" back into the financial services business. These fundamental considerations inculcate the new rules required for all who wish to render advice. Wall Street will never be the same if it chooses to compete in the best interests of the investing public. SCW

One security lawyer's unvarnished take on DOL's 34 answers to 34 questions and what unsettles him about them

The days when RIAs were the outsiders at the 401(k) party are fast coming to a close. What's new is that the mass of 401(k) assets 
is getting critical at about $3 trillion; fiduciary advisors are getting appreciated; fat fees and questionable kickbacks are getting exposed and stepping out of line is getting dicier as the Department of Labor tightens the regulatory screws.

The old reasons why the 401(k) business is attractive are still in place: there are fresh assets pouring in every month and when employees leave jobs or retire, they produce rollovers that build up IRA accounts for financial advisors. The drawbacks of getting into the 401(k) business are still in place, too. Dealing with retirement assets is really a second line of business and it remains -- unless you overcharge with hidden fees -- a low margin business with high potential fiduciary liabilities.

Still, the outsourcers, infrastructure and accumulated knowledge for RIAs to capitalize on is growing daily and a the mega-shift of assets away from brokers is making the 401(k) business riskier and riskier -- to ignore.

401(k) Stories

The past two years have been some of the most momentous in the relatively short history of the RIA profession. Legislators and regulators have been gradually embracing the fiduciary standard, though whether it will fully apply to everyone calling themselves advisors remains to be seen.

The Department of Labor’s crusade to lower costs and increase transparency in retirement plans means a spate of new regulations affecting advisors and brokers in that market. Dodd-Frank Financial Reform, meanwhile, continues to unroll across the profession, with the biggest change being a shift to state oversight of RIAs with less than $100 million AUM. In this section, you’ll find continually updated RIABiz.com coverage on all these topics.

RIA Compliance

The 24-pages of government-speak only make a dent in comprehending the 1,000-page rule -- and the DOL says there's more guidance on the way

One security lawyer's unvarnished take on DOL's 34 answers to 34 questions and what unsettles him about them

Stephen Winks

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