Products September 10, 2010

Paychex Offers Solution for E-Filing Form 5500

Paychex offers clients a solution for electronically reviewing, signing, and transmitting Form 5500 to the U.S. Department of Labor (DoL) through the Paychex Online Retirement Services Web site.
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Once an Electronic User ID and Signature PIN are obtained from the DoL, the new service allows clients to file Form 5500 from its Web site.  Effective January 1, 2010, retirement and welfare plans required to file an annual Form 5500 or 5500-SF must file electronically using the department’s new EFAST2 electronic filing system (see EFAST2 Adds Signature Option).  

A Paychex press release said in addition to the services provided for Form 5500 filing, the Web site offers other services including: 

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  • viewing and updating plan and participant information, 
  • determining employees who are eligible to enroll, 
  • obtaining forms and reports for operating plans, 
  • granting access to the site to clients’ accounting professional or financial adviser, and  
  • receiving answers to questions about clients’ plan. 

To learn more about retirement solutions from Paychex, view the Paychex 401(k) and Retirement Services online demonstration or download a free white paper from Paychex, Strategic Benefits of a 401(k) Plan for Smaller Businesses, at http://smallbusiness.paychex.com/benefits/retirement.aspx.  

Data & Research September 10, 2010

Trying Times for FAs

Russell Investment’s quarterly “Financial Professional Outlook” survey of financial advisers indicates this is the most challenging time in many advisers’ careers.
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The survey asked 348 advisers how they plan to shift asset allocations over the next 12 months.  Fifty-nine percent responded that they intend to invest more in emerging market equities; up 11% from the last survey in June. Two areas which advisers plan to allocate fewer funds to are real estate (down 6%) and cash (down 5%).  

Russell also asked the advisers to what extent are they using strategic asset allocation versus tactical asset allocation (as well as other means) to diversify clients’ portfolios.  While most advisers rely on strategic asset allocation (90%), Russell is somewhat concerned by the large percentage (85%) of advisers that also use tactical asset allocation – describing it as risky and stating that, “Deviations from [strategic] asset allocation should be made modestly, with great caution, and only when the conviction behind the research is strong.”   Global strategies and annuities continue to be popular forms of portfolio diversification.

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The fact that a majority of advisers are continuing to use tactical asset allocation doesn’t entirely corroborate with another of the survey’s findings.  As the most common open-ended response to the question, “How has your approach to assessing and managing your clients’ portfolio risk changed in the past few years?,” 22% (65 advisers) said that they are being more conservative or reducing risk in their clients’ portfolios, and most cited client fear or uncertainty as the cause. 

When asked “What, if anything, are you doing to generate new revenue and/or diversify your revenue streams from clients for whom a change is suitable?” nearly half (45%) of advisers responded that they are transitioning transactional clients to fee-based accounts. Thirty-nine percent said they are selling more annuities and 26% are using new methods for prospecting.   

Once the survey results were compiled, Russell drew the conclusion that this is a very trying time for financial advisers due to a confluence of challenges: declining revenues, an increasingly demanding clientele, and “extremely volatile markets.”  To manage these challenges, Russell found that most advisers are taking some sort of action to meet the demands of the times.  

 

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