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State efforts on fiduciary standards slow
InvestmentNews; Apr 3, 2018 @ 2:22 pm
Activity at the state level to raise investment-advice standards has slowed recently, as a Maryland lawmaker withdrew a fiduciary provision from his bill and the time line for a Nevada regulatory proposal remains uncertain.
The Maryland Senate approved a financial reform bill on March 19 that includes a provision instructing the Maryland Financial Consumer Protection Commission to study the outcome of federal efforts on fiduciary duty at the Labor Department and the Securities and Exchange Commission, and then determine whether Maryland should enact its own fiduciary law.
That language is weaker than a provision in the original bill that would have established a fiduciary duty law.
The author of the bill, Maryland State Sen. James Rosapepe, D-College Park, said he will give the DOL and SEC a chance to act before Maryland steps in.
But he's not confident the Trump administration will uphold the DOL rule, whose full implementation has been delayed while it undergoes a review that could lead to major changes.
"We're very serious about the [Maryland] commission looking at this in detail and figuring out what, if anything, we need to do next year in Maryland," Mr. Rosapepe said. "The Trump administration has been rolling back protections for the economy left and right."
Last July, Nevada enacted a law that extends the state's fiduciary law beyond financial planners to include brokers, sales representatives and investment advisers. It also gave the state's securities administrator, Diana Foley, authority to promulgate regulations that define violations of the law and compliance.
Ms. Foley said her office has been working diligently on a regulatory proposal, but doesn't know when it will be released.
Small Retirement Plan Sponsors Starved for Expert Advice
Financial Advisor; April 3, 2018
Small retirement plans with less than $50 million in assets remain underserved and their sponsors are hungry for help.
Fifty-two percent of small plan sponsors that aren’t working with an advisor are looking for one or might be considering it, according to a survey from TIAA that focused exclusively on not-for-profit plans.
“It’s definitely a lucrative area for advisors to get involved in,” said David Swallow, TIAA’s consultant relations practice leader. It’s also an area that’s been “relatively untapped" by consultants and plan advisors, he added.
Among other findings, most plan sponsors working with an advisor rely on their advisor for education on fiduciary responsibilities (92 percent) and for help with investment selection, plan design and monitoring plan investments (69 percent). All plan sponsors who work with an advisor said they’d recommend the use of a plan advisor to their peers.
The survey also revealed that 85 percent of small nonprofit plan sponsors who enlist the support of a plan advisor feel more confident that they’re meeting their fiduciary responsibilities, compared with 80 percent of plans without an advisor. Sponsors with an advisors were also more likely to say their plan’s fees are fair and competitive (79 percent versus 57 percent) and that their employees are saving adequately (40 percent versus 8 percent).