TITLE

Prudent Practices for Fiduciary Advisers Under the Pension Protection Act's Title VI

PUB. DATE
November 2007
SOURCE
Journal of Financial Planning;Nov2007, Vol. 20 Issue 11, p76
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The Pension Protection Act of 2006 (PPA) encourages sponsors of qualified pension plans to augment general investment education with specific investment advice for plan participants. It does so by allowing plans to retain qualified "fiduciary advisers" and by establishing "safe harbor" procedures to insulate plan sponsors from the liability associated with the advice. In defining a "fiduciary adviser" the PPA will have a profound impact not just on retirement advisers, but on the entire investment industry. This article, adapted from a new handbook, Prudent Practices for Fiduciary Advisers, examines what it means to be a fiduciary adviser under the new act, particularly as related to Section 601 (Title VI), and offers some of the best practices advisers should follow when delivering custom advice to plan participants. The PPA provides the fiduciary adviser who is associated with a plan's service vendor (such as a mutual fund company) prohibited transaction relief as long as the adviser provides advice using a certified computer model. For the fiduciary adviser who is not associated with a service vendor the adviser is required to be fee neutral (also referred to as "level comp"). That is, there can be no variability to the advisers compensation based on which fund family, asset class, or share class is suggested by the adviser. In all cases, the fiduciary adviser must agree to provide personalized advice to plan participants and disclose all conflicts of interest, including sources of fees and compensation related to the plan and its investment options. All disclosures must be accurate and comprehensive, and written in a "clear and conspicuous manner."
ACCESSION #
27518316

 

Related Articles

  • Sharing and Caring….  // Money Today;May2011, p10 

    The article reports on a complaint filed by some independent financial advisors (IFA) against a financial planning company's alleged offer of rebating of commission to its clients. The complaint states that the offer is a violation of Association of Mutual Funds in India (AMFI) guidelines. The...

  • Q & A. Menzies, Jason // Money Management;4/7/2005, Vol. 19 Issue 11, p32 

    Advises a financial planner about the ability of a self-managed superannuation fund (SMSF) to secure a borrowing to fund the purchase of a property in Australia. Normal restrictions on borrowings; Grandfather provisions in SMSF that has an investment in a unit trust; Transitional rule related to...

  • 5 STEPS TO IRA Perfection. Slott, Ed // Financial Planning;Mar2004, Vol. 34 Issue 3, p55 

    Offers tips and guidelines for financial planners on the proper handling of the individual retirement accounts (IRA) of their clients. Significance of the required minimum distribution (RMD) calculations in IRA; Required beginning date in RMD; Steps for the proper calculation of RMD. INSETS:...

  • PENSION EDGE: MIKE BROWN. Brown, Mike // Money Marketing;1/13/2005, p34 

    Provides recommendation on how to select the right section 32 policy that will provide the solution for many clients who are members of occupational pension schemes in Great Britain. Need for clients to protect their accrued tax-free cash entitlement with the implementation of the Finance Act;...

  • Double Plays. Korn, Donald Jay // Financial Planning;Sep2011, Vol. 41 Issue 9, p125 

    The article discusses the need for financial advisors to determine the role of a total return fund in a client's portfolio. Mutual fund analyst Miriam Sjoblom explains the concept behind total return funds. Particular focus is given to the success of Pimco Total Return and DoubleLine's total...

  • Truth or Dare for Your Adviser.  // Money;Feb2008, Vol. 37 Issue 2, p40 

    The article presents and discusses four questions useful in evaluating a financial planner's style and candor. What was the biggest mistake the planner has ever made? Are the planner's financial incentives and the client's best interests aligned? How have portfolios managed by the planner...

  • Not Just Product Pushers: Why Advisers Need Fund Wholesalers. Minton, Chris // Bank Investment Consultant;Feb2001, Vol. 9 Issue 2, p72 

    Discusses the factors why financial advisers need to hire mutual fund wholesalers. Requirement of commissions ranging from the purchase price; Responsibility in making prudent financial decisions; Role as liaisons with fund companies.

  • Neil Liversidge: Adviser choice is too constrained. Liversidge, Neil // Money Marketing (Online Edition);6/19/2013, p5 

    The author comments on the effects of sticking to a financial advice process. He says that rigidly sticking to such a process only works when the process is up to date. According to him, investment advisors these days are not allowed to think too much about the advice they give. The greater the...

  • Rich offerings. Davidson, Ian // CA Magazine;May2003, Vol. 136 Issue 4, p37 

    Discusses the emergence of financial planning industry in high net worth investors in Canada. Impact of the stock market bubble explosion on investors; Definition of high net worth; Features of private client programs from mutual fund companies.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics