Products June 20, 2016

‘Human-Centric Insights’ at Heart of New Hartford Funds Program

Hartford Funds today launched a new educational program that provides advisers with insights on how to strengthen client relationships.
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Hartford Funds’ new Human-Centric Insights Panel program was created to help advisers “meet the expanding client needs that now accompany financial planning and wealth management.”

The program is built around a series of panel discussion modules that each focuses on a key area involved in running a successful financial advisory practice. “The initial set of panelists includes Dr. Kristy Archuleta, Dr. Vicki Bogan, Dr. Barbara Nusbaum and Tim Sanders, with possible additional panelists in the future,” the firm explains.

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According to Hartford Funds, Archuleta is currently the program director of the personal financial planning program at Kansas State University, and has a doctoral degree in marriage and family therapy, with an emphasis on personal financial planning. She will focus on the issues couples face when planning for regular expenses and retirement.

Bogan is associate professor of finance and director of the institute for behavioral and household finance at Cornell University. She will focus on investor behavior. Nusbaum, a psychologist and “expert on the intersections of money, psychology and life,” will share insights on behavior and emotions related to money. Sanders, described by Hartford Funds as “a renowned speaker, author and expert on emotional talent, social media, sales and likability,” will focus his perspectives on adviser-client perception.

The program launched with seven articles from the four panelists, tapping into subjects which include:

“When Financial Therapy is the Answer for Married Clients,” Dr. Kristy Archuleta

“Helping Investors Get Out of Their Own Way,” Dr. Vicki Bogan

“What Every Advisor Needs to Know About Hyperbolic Discounting and Why,” Dr. Vicki Bogan

“Create Empathy. Create A Better Client Relationship,” Dr. Barbara Nusbaum

“Leave Emotion Out of the Conversation at Your Own Risk,” Dr. Barbara Nusbaum

“High Touch Service for a High Tech World,” Tim Sanders

“The Art of Un-teaching,” Tim Sanders

The firm also unveiled a new website, www.humancentricinvesting.com, coinciding with the new modules. By exploring the site, “advisers will gain access to distinct insights from experts who will address advisor-client relationship issues surrounding couples and finances, emotions and behaviors related to money, and perceptions of financial advisors.”

Compliance June 20, 2016

MassMutual Agrees to Settle Excessive Fee Suit

MassMutual has agreed to pay $30.9 million to former and current participants of the MassMutual Thrift Plan and the Massachusetts Mutual Life Insurance Co. Agent Pension Plan.
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According to documents filed with the court on June 15, the parties in excessive-fee case Dennis Gordan et al. v. Massachusetts Mutual Life Insurance Co. et al. have reached a settlement and are awaiting court approval.

The motion, filed in District Court for the District of Massachusetts, states that MassMutual has agreed to pay $30.9 million to former and current participants of the MassMutual Thrift Plan and the Massachusetts Mutual Life Insurance Co. Agent Pension Plan, as well as to meet nonmonetary terms, which, over a period of four years, “secure the prudent operation and administration of the plans.”

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The original action was filed in November 2013. Plaintiffs alleged “that the plans [had] breached their duties under the Employee Retirement Income Security Act (ERISA) by 1) causing unreasonable administrative expenses to be charged to the Plans; 2) providing unreasonably priced and poor-performing investment options; and 3) providing a fixed-income investment option that was unduly risky and expensive.”

Throughout the process, MassMutual has consistently disputed all claims regarding any alleged breaches or ERISA violations. In an emailed statement, Michael McNamara, a spokesman for the company, said, “While MassMutual denies the allegations within the complaint and admits no fault or liability, we are pleased to put this matter behind us, avoiding the expense, distraction and uncertainty associated with protracted litigation. MassMutual is proud to continue to extend our award-winning retirement plan services and benefits to our employees and field participants to help them secure their future and protect the ones they love. Importantly, the amount of the settlement is not material to MassMutual’s financial strength, nor to its 2016 financial results.”

The settlement, beyond the monetary recovery, requires MassMutual to grant relief to participants by, for example:

  • Ensuring that the plans’ participants are charged no more than $35 per participant for standard recordkeeping services;
  • Employing an independent fiduciary to determine that the settlement meets the requirements of prohibited transaction class exemption (PTE) 2003-39 and is fair and reasonable;
  • Ensuring that fees paid to the plans’ recordkeeper will not be set or determined on a percentage-of-plan-assets basis; and
  • Each year during the settlement period, the plan’s fiduciaries will attend a fiduciary responsibility presentation provided by experienced ERISA counsel and an independent investment consultant.

This case joins other excessive-fee cases against large firms such as Fidelity Investments and Ameriprise, which settled for $12 million and $27.5 million, respectively.

The MassMutual settlement agreement is here.

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