Deals & People July 30, 2007

Jeffrey Carney Is BoA’s New President of Integrated Retirement Business

Bank of America has appointed Jeffrey Carney as president, Bank of America Retirement and Global Wealth&Investment Management (GWIM) Client Solutions.
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Carney, who came to BoA from his position as president of Fidelity Retirement Services, will oversee the development and delivery of integrated retirement solutions for Bank of America’s nearly 17 million customers approaching or living in retirement, as well as its corporate and institutional clients, according to a press release. In his new role, he will expand and execute Bank of America’s enterprise-wide retirement strategy, encompassing all related product, sales and service, marketing and distribution activities.

Carney will also oversee the development of integrated product solutions for affluent and wealthy clients, and serve as president of Banc of America Investment Services, Inc. (BAI), the company’s retail brokerage, the announcement said. He will oversee all brokerage, banking, credit, custom credit, non-proprietary and fee-based investment products, fiduciary roles and philanthropy for GWIM clients, and will be responsible for the company’s mid-market institutional asset management business and all GWIM call center operations.

At Fidelity Retirement Services, Carney was responsible for the firm’s defined contribution, defined benefit, non-qualified plans and health savings businesses.

In Practice July 30, 2007

Auto Plan Features Biggest Influence on Retirement Marketplace

Advisers predict that auto enrollment and auto deferral increases are the two principal features most likely to shape the retirement marketplace over the next three years.
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The Pension Protection Act and growth of the defined contribution marketplace is viewed as a business expansion opportunity by advisers. Advisers say that 75% of their plan sponsor clients will add an auto enrollment feature within the next two years, according to a survey of advisers serving the retirement market by Putnam Investments. However, two of every five sponsors are resisting its use over concerns about increased matching contribution and profit sharing costs resulting from the anticipated rise in enrollment.

For their clients who do implement auto enrollment, the 525 advisers surveyed are recommending a variety of default investment options. Eighty percent of advisers said they recommend target date funds; 65% risk-based lifestyle funds; and 63% balanced mutual funds. Only 13% of respondents said they are waiting for final Department of Labor guidance on Qualified Default Investment Alternatives (QDIAs). Open architecture within bundled plans is a critical must-have, according to the survey.

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Sixty percent of advisers say their clients have sufficient information related to plan fees, but they still rely on advisers for help, and half of the advisers say that they serve as fiduciaries to the plans they manage.

“Our 401(k) advisors strongly agree that auto features will be one of the dominant drivers of increased retirement savings, but the hurdle of perceived added program costs means that many plan sponsors will not provide these features to their employees,” said David Tyrie, Managing Director, Director of Retirement Services, Putnam Investments, in a press release about the study. “What’s clear, too, from our poll is that the role of the advisor is critically important long after the plan has been implemented, since plan sponsors continue to be reliant on their advisors for assistance and insight related to numerous operational and administrative plan issues.”

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