Data & Research November 14, 2013

Advisers Strongly Oppose Fiduciary Update

More than nine in 10 financial advisers continue to oppose a pending Department of Labor (DOL) rule change expected to broaden the definition of “fiduciary.”
Reported by

Ninety-one percent of advisers in the Financial Services Institute’s (FSI) poll, “Financial Advisors Weigh in on Politics, the Economy, Taxes & More,” said they oppose the DOL’s plan to broaden the fiduciary definition (see “New Restrictions Loom for IRA Rollovers”). That’s a spike from the 72% of advisers who said they opposed the new definition in February 2012.  

A change in definition would likely lead to more prohibited transactions under the Employee Retirement Income Security Act (ERISA), which stipulates that fiduciary advisers must make all plan recommendations in participants’ best interest and limits opportunities for firms to profit from selling additional services.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Other topics include the recent federal government shutdown and debt ceiling stalemate. When asked whether the shutdown and debt ceiling fight affected clients in a negative way, fewer than half (46%) said yes. A substantial majority of respondents (77%) believe that a short-term fix will be passed to avoid another shutdown early next year.

Advisers were split at 50% on whether work as a financial adviser increased because of problems–real or perceived–clients faced during the government shutdown and debt ceiling debate    

Just 1% of survey respondents said they think raising taxes should be considered as part of a grand bargain on the debt ceiling. Fifty-five percent favored cutting spending, and 42% said both raising taxes and cutting spending are necessary.

“Financial advisers are clearly paying attention to policy and politics as Washington becomes more and more a part of their planning for their clients,” said Dale Brown, president and CEO of FSI. 

Looking to the wider economy, more than half the advisers (57%) said they expected growth to stay flat in 2014, while 59% expect neutral performance from the equities markets.

Another telling figure from the poll shows only 57% of financial advisers have a succession plan finalized to pass along practice management functions once they retire.

FSI conducted the poll in-house with input from 2,528 financial advisers in early November. More on the survey results and FSI is available here.

Diversions November 14, 2013

Couples Fib About Holiday Spending

When it comes to holiday spending, one-third of couples lie, disagree or cover up, a survey found.
Reported by

A diverse group of American couples were quizzed about their holiday shopping habits using the ABC sitcom “Modern Family” as a guide, and though heterosexual married couples said they disagree and dissemble the most, all types of couples reported differences over holiday spending, according to a survey by McGraw-Hill Federal Credit Union.

When asked if they disagree over holiday spending, nearly half (48%) said they do clash about how much to spend during the season. Of the divorced/in a relationship segment, 43% disagreed on holiday expenses. Among committed same-sex couples, however, the percentage that disagrees fell to 37%.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

When it comes to fibbing about what they spend, fully one-third of the heterosexual marrieds (34%) admitted lying to their spouse. Of the divorced and same-sex segment, only 25% admitted to “harmless” spending lies.

More than half the married couples reported paying with cash to cover up a large purchase, and more than one in ten has actually taken out a credit card in their own name to conceal spending.

Among gay couples, only a third said they cover up by using cash. Same-sex couples are more likely to retrieve and pay a bill before the partner notices, by 15%, compared with 9% in the general population.

Despite the tendency to disagree over how much to spend and to cover up splurges, 55% of Americans have never returned an item because they felt guilty about the price.

McGraw-Hill Federal Credit Union’s survey was designed to explore how underlying spending attitudes may affect shopping habits and overall financial wellness during the holiday season. It sought information from 1,000 respondents, including heterosexual married couples, divorced couples (remarried or in relationships) and committed or married same-sex couples.

«