Products February 9, 2012

Pioneer Launches Tool for 408(b)(2) Compliance

Pioneer Investments launched a tool for registered investment advisers (RIAs) to help them comply with the new 408(b)(2) regulation.  
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Pioneer’s tool is a model Advisory Agreement designed to meet the requirements of the 408(b)(2) regulation from the Department of Labor (DoL), which says advisers must provide 401(k) plan sponsors and other retirement fiduciaries with standardized disclosure about their business before they provide advisory or other services to retirement plans. The rule will take effect July 1, 2012 (see “DoL Issues Final Rule on 401(k) Disclosure”).

To develop the Advisory Agreement, Pioneer partnered with Drinker Biddle &Reath LLP, a national law firm; and fi360, a specialist in investment fiduciary responsibility.

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“We have found that retirement plan advisers generally understand what 408(b)(2) represents, but find it a challenge to incorporate the requirements into their own practice,” says Jamie Axford, senior vice president and director of business development, Investment Only and Retirement Group at Pioneer. “This model Advisory Agreement provides advisers with an easy-to-understand solution for meeting their obligations under the new rule.”

Diversions February 9, 2012

Men Save Less in Male-Dominated Environment

Men tend to become impulsive, save less and use credit cards more when under the perception that women are scarce, according to research from the University of Minnesota’s Carlson School of Management.  
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The research report, titled “The Financial Consequences of Too Many Men: Sex Ratio Effects on Saving, Borrowing and Spending,” proposes a theory that sex ratio affects economic decisions. In the animal world when females are scarce, males become more competitive for access to mates. The researchers propose that sex ratio also has pervasive effects in humans, such as influencing economic decisions.

As part of the research, participants read news articles that described their local population as having more women or more men. After reading, they were asked how much money they would save from a paycheck and how much they would borrow with credit cards. When women were scarce, the savings rates for men decreased 42%.

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In another study, participants looked at photos with different gender proportions and were asked to choose between receiving $20 tomorrow or $30 in a month. When women were scarce, men tended to take the money immediately.

Women’s financial choices were not affected by sex ratios, but a scarcity of women led people to expect men to spend more money during courtship, such as paying more for engagement rings.

The researchers also calculated sex ratios of more than 120 U.S. cities and found that communities with lots of single men had more credit cards and higher debt.

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