Compliance February 13, 2023

DOL: More Time to Comment on Fiduciary Correction Program

The Department of Labor has extended the public comment period for a program that would allow fiduciaries to self-correct for retirement plan contributions that are not invested, rather than going to the DOL first.

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The Department of Labor has provided the public with more time to comment on amendments to the Voluntary Fiduciary Correction Program, it announced Monday.

The DOL’s Employee Benefits Security Administration reopened the public comment period—which had concluded on January 20—on amendments to the VFCP and proposed amendments to the associated class Prohibited Transaction Exemption 2002-51, the department stated. The new period runs for 60 days from notice being published in the Federal Register on Feb. 14, which means the extended period should conclude April 15.   

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“Reopening the comment period will allow the Employee Benefits Security Administration to obtain important public input on implementing the changes mandated by Congress in the SECURE 2.0 Act of 2022 that impact the department’s Voluntary Fiduciary Correction Program,” stated Lisa Gomez, the assistant secretary for employee benefits security.

The DOL’s proposed rule, published in November 2022, would allow fiduciaries to self-correct for participant contributions that are not invested or participant loan repayments that are not repaid and then to notify the department.

Plan sponsors, in their capacity as fiduciaries, are urged to comply with the Employee Retirement Income Security Act and the Internal Revenue Code by self-correcting violations. If plans voluntarily correct eligible transactions and meet the specified requirements, the program and exemption allow plans to avoid potential civil enforcement actions and penalties.

The SECURE 2.0 Act of 2022—a package of a package of retirement reforms passed by Congress in December 2022—included provisions for retirement and other types of plans. One change was to allow plans to self-correct errors related to loan administration through the Self-Correction Program under the Employee Plans Compliance Resolution System, within the jurisdiction of the IRS. Matt Hawes, a partner in the Morgan Lewis law firm, has explained previously that the earlier IRS policy required a process called the Voluntary Correction Program, which allowed plan sponsors to pay a fee and request IRS approval to make a correction.

Because SECURE 2.0 was passed after the proposal’s initial publication, the DOL is seeking additional feedback, notes Grant Vaught, a spokesperson at the Department of Labor, by email.

“The law includes a provision that requires the voluntary fiduciary correction program to cover certain violations related to participant loans if self-corrected violations align with the IRS’ Employee Plans Compliance Resolution System,” he says. “EBSA is reopening the comment period for 60 days to gather additional comments on any issues related to the amendment of the program to implement the act’s requirements.”

Deals & People February 13, 2023

Advisory M&A

Cetera invests in $1.7B Kansas-based advisory; Atria snags two adviser practices from LPL; and more.

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Cetera Makes Minority Investment in $1.7B Prosperity Advisors

Cetera Financial Group, the country’s largest network of financial professionals, made a minority investment in Overland Park, Kansas-based Prosperity Advisors, which oversees $1.7 billion in client assets.

Los Angeles-based Cetera Advisors LLC connects further with the firm led by adviser Paul Ewing, along with more than 60 employees in four locations in Kansas, Ohio and Indiana. The network of advisers has been affiliated with Cetera since 1999, and the investment will go toward driving growth for the firm, according to the announcement. The firms did not disclose the amount of the investment.

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The investment builds up Cetera’s partner practice program, which provides select advisers the option to have Cetera invest in a minority stake in their firm. In October 2022, Cetera completed a minority investment in CCR Wealth Management, which has $2.5 billion in assets under management.

“These investments put Cetera’s skin in the game to help practices grow in ways that are most meaningful and important to each adviser and their business,” Adam Antoniades, Cetera’s CEO, said in a statement. “We look forward to more of these selective investments as we continue to serve as a wealth hub to our valued advisors.”

Cetera has more than 8,000 financial professionals with about $322 billion in assets under administration and $115 billion in assets under management.

Atria Adds 2 Teams From LPL With $220M in Assets

Atria Wealth Solutions continued growing its wealth management business with the additions of Marshall Wealth Management Group and Cypress Private Wealth from LPL Financial, the firms announced. The firms, led by Brad Marshall and Dominick Ruiz, respectively, add more than $220 million in combined client assets to New York-based Atria.

Marshall and Ruiz, previously assigned to the same branch at LPL, both decided to join Atria to work from Atria’s California offices in Los Gatos, Pasadena and San Jose, while keeping their individual brands. The advisers plan to leverage Atria’s resources to scale their wealth management business beyond California, according to the announcement.

Marshall Wealth Management Group focuses on investment management, financial planning and insurance needs for small businesses, entrepreneurs, business executives and technology professionals. Joining Marshall in the move to Atria are Robert Claros, wealth adviser, and Deanna Dominguez, director of business development.

Cypress Private Wealth provides clients with financial planning; tactical and strategic asset allocation; risk management; options and alternative investing; estate planning; and trust services. Ruiz will be joined by hisco-founder, Patrick Bennett, at Atria.

All-Woman Advisory Leaves Ameriprise for Golden State Equity Partners

Arise Wealth Management LLC, an all-woman team located in Minnesota, is leaving Ameriprise to go independent under the umbrella of Golden State Equity Partners, according to an announcement.

The Arise team is led by Gina Rypkema, a private wealth adviser, and she will be joined by advisers Donna Gunderson, Shelley Lof and Nancy McCoyne. According to the announcement, greater independence will give the team greater investment product flexibility and enhanced wealth management technology.

The Golden State family of companies, comprised of Golden State Wealth Management, Golden State Equity Partners and Golden State Asset Management, have more than $3 billion in assets under care and provide succession planning, compliance oversight, dedicated transition support, a Turnkey Asset Management Program, a general brokerage agency and a mortgage program.

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