Products July 19, 2011

Commonwealth Offers Advisers Broadridge Solution

Commonwealth Financial Network has partnered with Broadridge Financial Solutions to offer its advisers access to Broadridge’s Forefield applications.  
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Forefield, a division of Broadridge, is a suite of Web-based education and client communication solutions. The resources are being made available to Commonwealth advisers with the intention of broadening the scope of the adviser’s deliverables, as well as allowing them to become well-versed on a particular financial planning topic quickly, the broker/dealer said.

The Forefield set of tools includes the following components:   

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  • Forefield Advisor: Provides access to more than 2,300 articles, 200 illustrations and tables, 200 calculators, and 400 client presentations on financial planning topics and scenarios.
  • Forefield Newsletter: Offers the ability to create newsletters on-demand using monthly content updates, articles, and market summaries.
  • Forefield Continuing Education Service: Allows advisers to earn the credits necessary to satisfy their CE requirements for many popular accreditations—including CFP, ChFC, CLF, and CLU—online. Forefield tracks the date on which an adviser successfully completes a test and automatically notifies the CFP Board of Standards.

“Broadridge is very excited to provide Commonwealth advisers with the trusted content and powerful client communication tools from Forefield,” said Andrew Besheer, vice president, customer communications, Broadridge. “This agreement represents a very significant client win for Broadridge’s Forefield division. We look forward to building a strong working partnership with Commonwealth, one of the acknowledged leaders in the independent brokerage market,” he added.

Advisers will have access to an extensive selection of materials to post on their firm’s Web site, including more than 1,000 articles and newsletters, as well as video market commentary that can be posted automatically for advisers using Commonwealth’s EasySite Web site program. Research package subscribers will also receive Forefield Alerts on recent regulatory and legislative changes.

The suite of services went live to more than 1,400 Commonwealth advisers on June 30, 2011.

Compliance July 18, 2011

Kraft Denied Summary Judgment

A federal judge has denied summary judgment for Kraft in an excessive fee suit.
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U.S. District Judge Ruben Castillo, of the U.S. District Court for the Northern District of Illinois, concluded that a jury could find that “a reasonably prudent business person with the interests of all the beneficiaries at heart” would have banned actively managed funds from their 401(k) plan as they had done in the Kraft defined benefit plan because they had concluded that active funds did not consistently outperform index managers. The court said that, although there may be differences between defined benefit plans and defined contribution plans, it believed a jury could reasonably find that a prudent fiduciary would have offered similar index funds in the 401(k) plan based on the same fiduciaries’ decision to eliminate active managers in the Kraft defined benefit plan.  

Attorney Jerome J. Schlichter said, “This ruling makes clear that plan fiduciaries who make investment choices in the defined benefit plans may commit fiduciary breaches when they make different choices in the 401(k) plan.” 

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A trial date has not yet been set. 

The district court previously ruled Kraft had met the Employee Retirement Income Security Act (ERISA) requirements for fiduciary behavior in monitoring its recordkeeping service agreement with Hewitt regarding the Kraft Foods Global Inc. Thrift Plan, and investigating and then deciding to unitize its company stock funds (including having a cash component to allow for faster share redemptions). The court contended that ERISA requires only that plan fiduciaries carry out a prudent process in making plan decisions, not achieve perfection by reaching decisions with which all agree. 

However, the 7th U.S. Circuit Court of Appeals sent the case back to the district court, saying there was genuine issue of material fact as to whether Kraft acted prudently (see "Appellate Court Sends Back Kraft Fee Case"). 

The latest district court ruling is here.

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