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Financial Advisors Have New Reasons to Review Fiduciary Practices and Liability Insurance

Excerpt: The [LaRue v. DeWolff Supreme Court] case adds to the litigation concerns that threaten to chill growth of advisor-sold 401(k) plans to small- and mid-sized businesses, an increasingly productive area for many financial advisors. At Fidelity alone, total record-kept assets in such plans stood at $21.2 billion at the end of 2007, an increase of 26% from the previous year. Several factors are helping to drive the growth in advisor-sold 401(k) plans, including the Pension Protection Act of 2006, which provided guidelines necessary to encourage plan sponsors to retain qualified fiduciary advisors and to define safe harbor procedures to insulate them from the liability associated with the advice.

Baby Boomer and GenX Women: Retirement Readiness and the Role of Women Financial Advisors

"Their personal savings will be a significant source of retirement income, yet only half of Baby Boomer women with savings have $200,000 or more in retirement savings; only one-quarter of Generation X women have $100,000 or more saved for retirement.... Women prefer to work with women advisors, yet women represent a minority of the advisor community.... Women may not be 'connecting the dots' about a career as a financial advisor, and not recognize that many aspects of the job directly appeal to their own work-values."

Many Employers Want Guidance From Financial Advisors About Voluntary Benefit Options

"Two of five employers that currently do not rely on guidance from a financial advisor say they would welcome such help with voluntary benefit options such as retirement plans, life and disability insurance, and other protection benefits ... Firms that would characterize such assistance as 'extremely' or 'very' valuable range from 33 percent for those with fewer than 25 employees to 55 percent for those with 1,000 or more employees ... The percentages of employers that would see such advice as at least 'somewhat' or more valuable range from 75 percent for the smallest employers to 80 percent for larger firms[.]"

401(k) Fiduciary Responsibilities for Plan Sponsors and Financial Advisors

So what should fiduciaries be doing to protect themselves? Performing due diligence of 401(k) providers to review costs and conflicts, purchasing fiduciary liability insurance, closely monitoring funds and providers, and setting up an ERISA expense account to identify and capture excessive fees are just some of the actions listed on a new mini due diligence worksheet created by Millenium.

Advisors Providing Services to Arrangements Governed by ERISA Should Review Fiduciary Practices and Double-Check Professional Liability Insurance

Some areas advisors working with 401(k) plans might review include: Service agreements, vendor relationships and fees, documentation, and education and training.

Enhancing Outcomes: The Value an Advisor Brings to K-12 Participant Preparedness and Account Performance in 403(b) Plans (PDF)

16 pages. "This paper evaluates the impact of financial advisors in the 403(b) experience for plan participants. It also examines the extent to which participants want an advisor option and whether providing that option is beneficial to them. As plans and funds grow increasingly complicated to navigate on one's own, the value of an advisor can be an important service. The results of this study could help participants decide whether they want to work with an advisor or use a do-it-yourself approach."

Federal Health Reform Could Threaten Autonomy of Self-Insured Employers

Excerpt: If Congress enacts federal health care reform, self-insured plans will be forced to comply with any new requirements .... Employers might face a surcharge for offering so-called Cadillac plans, where the annual value of benefits exceeds $8,500 for individuals and $23,000 for families [and] benefits equaling $705 a month could draw the surcharge, a 40% tax.

How Insurance Agents Can Ascend Under the New DOL Rule

"It would be logical to conclude that DOL 4.0 has left agents little hope of remaining viable. But the exact opposite is true. Insurance agents have an enormously important contribution to make to their client's retirement security, and in a way that investment advisers and financial planners typically overlook."

Consumers Won Reversals for 47% of Health Claim Denials in New York

Excerpt: [The] Consumer Guide to Health Insurers [issued by the New York State Insurance Department] indicates that of the 71,787 cases where people were seeking to reverse a health insurer's denial of coverage, exactly 33,921 won their appeals.

Federal Court Approves 401(k) Settlement Involving Hartford Life

Excerpt: The settlement, whose financial terms were not publicized, involves the administrators of all 401(k) plans that used Hartford Life Insurance Co. as a full-service provider to design, implement, administer or assist in the administering of their 401(k) plans since Nov. 14, 2003, according to a statement from Shepherd, Finkelman, Miller & Shah, a law firm involved in the case.