Despite reports that the Department of Labor (DOL) was ordered by President
Donald Trump to delay the implementation of the fiduciary rule by six months, the final memo to the agency did not contain such an order.
In
the memorandum, Trump says the DOL fiduciary rule may significantly
alter the manner in which Americans can receive financial advice, and
may not be consistent with the policies of his administration.
The
memo directs the DOL to examine the fiduciary rule to determine whether
it may adversely affect the ability of Americans to gain access to
retirement information and financial advice. As part of this
examination, he ordered the agency to prepare an updated economic and
legal analysis concerning the likely impact of the fiduciary rule,
“which shall consider, among other things, the following:
Whether
the anticipated applicability of the Fiduciary Duty Rule has harmed or
is likely to harm investors due to a reduction of Americans’ access to
certain retirement savings offerings, retirement product structures,
retirement savings information, or related financial advice;
Whether
the anticipated applicability of the Fiduciary Duty Rule has resulted
in dislocations or disruptions within the retirement services industry
that may adversely affect investors or retirees; and
Whether the
Fiduciary Duty Rule is likely to cause an increase in litigation, and
an increase in the prices that investors and retirees must pay to gain
access to retirement services.”
Trump goes on to say that
if the DOL makes an affirmative determination as to any of the
considerations or if it concludes for any other reason after appropriate
review that the rule is inconsistent with the priority of Trump’s
administration, then the DOL should publish for notice and comment a
proposed rule rescinding or revising the rule, as appropriate and as
consistent with law.
Of course, this review could lead to a delay in, or even halt of, implementation of the rule.
NEXT: Halt of rule won’t change momentum
Specifics of the DOL process remain murky in that Trump’s Labor
Department is still being led by an interim secretary. His full-term secretary nominee, CKE
Restaurants CEO Andrew Puzder, is of course a vocal critic of many current
government policies including the Affordable Care Act, the DOL’s pending
overtime regulations, and raising the minimum wage. He has not commented
publicly about how exactly he would like to see the DOL rulemaking unraveled,
but in past media coverage he has spoken about the importance of leaving
management of labor issues and other aspects of business regulation to the
states.
Industry responses have been fast and furious—with a clear
consensus building around the idea that halting the DOL rulemaking won’t stop
outright the momentum
that has been building around increasing the fairness and transparency of advisory
models.
Lockton Retirement Service’s head of legal and regulatory
affairs, Samuel Henson, said he expects the rule to undergo major changes or to
be completely scrapped, but even its outright repeal won’t undo the industry
landscape it leaves behind.
“The impact of that rule will not go away,” Henson feels.
“The amount of time and effort that has already gone into compliance with that
rule by financial services companies is going to have a lasting impact. I think
a lot of people had decided to become ERISA fiduciaries, or at least to act more
as such." And that is a positive thing.
Even with his optimism that firms will continue to improve their
business practices from the point of view of transparency and eliminating
conflicts of interest, he admits the
picture has changed with President Trump and the Republicans in charge of
Congress: “Will the legacy of the rule survive exactly as it stands right now?
I doubt it.”
Tom Reese, adviser with Conrad Siegel Investment Advisors in
Harrisburg, Pennsylvania, agrees that many firms may “still put in a good faith
effort to meet similar standards.” Just what this looks like will vary from
firm to firm, “but there remains something to be said about the willingness to
commit to the fiduciary relationship.”
“Many firms have invested a lot of time and money to be in
compliance with the DOL’s fiduciary rule,” he tells PLANADVISER, “so it is
unlikely that these companies will just go back to business as usual. Some
firms may decide not to fully abide by the fiduciary rule as it was proposed,
but they will likely try to eliminate conflicts and put in a good faith effort
to meet similar standards.”
NEXT: Wait-and-see
attitude pays off
Firms that have been in a wait-and-see mode regarding making
big investments to improve compliance process and change advisory fee models probably
feel pretty well-vindicated right now, Reese notes, but they may still find a
need to make such changes further down the line as their competitors
start to market their willingness to be a full-fledged fiduciary. For
firms that will continue to provide commission-based services that may have
potential conflicts, it will be harder to compete, Reese speculates.
It should be stated that Reese and the others who have come
down in favor of strengthening the DOL advice standards have their own car in the
race: As an independent registered investment adviser he serves as a fiduciary
and does not receive commissions. He says this is the “clearly the less
conflicted model,” and so if/when the DOL rule is fully eliminated, “we would certainly
continue to provide this same level of service.” Others will do the same.
He further speculates that with the fiduciary rule
postponed, the burden of closely watching and assessing the performance of
service providers will fall even more on the shoulders of plan sponsors and
participants. “There is even more pressure on employers to make sure that they
are taking a proactive approach to meeting their own fiduciary responsibility,”
he explains. “Hopefully, this past year gave employers a better understanding
of what they need to look out for to act as fiduciaries for their plan
participants. Employers will need to continue to take steps to make sure that
they are regularly reviewing their retirement plan. This would include
developing an investment policy statement and regularly reviewing share class,
fee benchmarking, and performance of the plan investments.”
Reflecting the contentious political environment that led to
this turn of events, others in the industry have taken essentially the opposite
view of Reese—and yet others have argued for a middle ground, suggesting that
the DOL rulemaking was perhaps flawed, but a uniform fiduciary standard that is
more thoughtfully constructed could work. For example, the Financial Services Institute
(FSI) shared a beaming endorsement of the President Trump’s move to halt the current
rulemaking, penned by FSI President and CEO Dale Brown.
“On behalf of the retirement savers who depend on their financial advisers,
we applaud the president’s action, which will delay a rule with devastating
consequences for so many people,” Brown says. “Our members pride themselves on
working in the best interest of their clients. FSI has supported a uniform
fiduciary standard since 2009—before Dodd-Frank became law. We stand ready to
work with the president and his administration to put in place a uniform
fiduciary standard that protects investors, while not denying quality,
affordable financial advice to those who need it most.”
NEXT: Clear and
conflicting viewpoints
Brown suggests the Department of Labor fiduciary rule “would have not
only made it harder, but impossible, for many hard-working Americans to access
critical retirement advice.”
Other industry groups to quickly weigh in included the Financial
Planning Coalition (FPC), made up of the Certified Financial Planner Board of
Standards, the Financial Planning Association and the National Association of
Personal Financial Advisors. Suffice it to say, FPC is strongly critical of
President Trump’s decision to cease the implementation of a rule that has been
a decade in the making.
“The Financial Planning Coalition strongly opposes the
action taken today by President Trump to halt the Department of Labor’s final fiduciary
rule that will protect millions of Americans saving for retirement,” the group writes
to PLANADVISER. “With just two months to go before its implementation date, the
President has effectively given the green light to maintain the status quo of
conflicted financial advice.”
It is the position of the FPC that, by issuing this
memorandum, the president is “directing the Department of Labor to produce an
outcome that will likely lead to either a complete gutting of this thoroughly
vetted consumer protection or lead to its outright demise. Either one is a bad
outcome for American retirement savers … We applaud those firms and individuals
who have already acknowledged the rule’s benefit to consumers and taken action
to comply with the DOL fiduciary rule.”
The Investment Company Institute (ICI), the advocacy group
that represents the interests of mutual fund companies, shared a statement from
Paul Schott Stevens, more or less to the effect that DOL had the right idea in
mind in crafting the fiduciary rule—but failed in its approach.
“These executive orders begin an important, overdue process
to revisit and reform aspects of the regulatory regime that are overly complex,
burdensome, and costly,” Stevens argues. “The Administration should use this
time to address flaws in the rule and pursue a harmonized standard across the
retail and retirement marketplace, coordinating with the Securities and
Exchange Commission to ensure investors’ best interests are paramount.”
By using this site you agree to our network wide Privacy Policy.
Retirement Industry People Moves January 30 to February 3
MassMutual
Appoints 5 Managing Directors in Retirement Services; OneAmerica
Appoints Head of Guaranteed Income Products; Fiduciary Vest Names New Partner; and more.
MassMutual Appoints 5
Managing Directors in Retirement Services
Massachusetts Mutual
Life Insurance has appointed five new managing directors in an effort to enhance
services offered to financial advisers supporting retirement plans. These
individuals will train and educate advisers on the firm’s retirement plan
products and services.
Jeff Beauregard will support retirement plans in the
emerging market defined as plans with up to $10 million in management. He will
partner with Brian Mezey who serves the institutional market. Prior to joining
MassMutual, Beauregard served as a defined contribution specialist with
Fidelity Investments. He has 18 years of experience in the retirement plans
market.
Ali Pino will support emerging market sales in South Virginia. She
will partner with Garret Carlough, who supports sales in the institutional
market. Previously, Pino served in a variety of roles at John Hancock,
including internal wholesaler and relationship manager. She has more than 11
years of experience in the retirement plans marketplace.
Braam Nel supports emerging market sales in Eastern Pennsylvania and
partners with Tim Ross, managing director for institutional sales. Previously,
Nel was a relationship manager for retirement plans at MassMutual, and has more
than 10 years of experience in the retirement plan and investment markets.
Taylor Booth supports sales of retirement plans in the institutional
market in Illinois and Indiana. Prior to joining MassMutual, Booth was a
workplace sales director at MetLife, overseeing business development in the
voluntary benefit and retirement plans markets.
Michael Farber supports the emerging market for wirehouse firms in North
Georgia, and partners with Jason Bouldin, who supports the institutional market.
He previously was a district manager at ADP Retirement, a retirement plan sales
associate for John Hancock, and a financial adviser. He brings to his new role
more than seven years of experience in the financial services industry.
The
addition of these individuals expands MassMutual’s retirement sales team to 79.
“Our
nationwide network of managing directors is helping promote MassMutual’s
leadership in the retirement plans marketplace and extend our capabilities to
help American workers retire on their own terms,” says Hugh O’Toole, head of Workplace Distribution. “Financial advisers
can count on our field support to help employers make the most of their new
retirement plans and help their employees retire on their own terms.”
NEXT: OneAmerica
Appoints Head of Guaranteed Income Products
OneAmerica
Appoints Head of Guaranteed Income Products
Marty
Fleischman, CFA, has been named vice presidentof institutional
investment products for OneAmerica.
He will be responsible for expanding OneAmerica guaranteed product offerings,
initially focusing on Stable Value Wrap (synthetic Guaranteed Income Contracts)
for the defined contribution (DC) market.
“Entry into this market demonstrates the OneAmerica
continued commitment to serve the retirement plan marketplace,” says Bill Yoerger, presidentof Retirement
Services for OneAmerica. “Focusing on the defined contribution needs of
large plan sponsors required a recognized authority on IIP, and Marty certainly
has the background and experience to lead this initiative for us.”
This industry veteran brings to his new role more than
30 years of experience in financial services. He previously served as an
executive at Mutual of Omaha and Pacific Life. He also was assistant vice
president from 1994 to 2009 at Pacific Life Insurance Company. Fleischman
earned his master’s degree from the University of Wisconsin-Madison.
NEXT: Fiduciary Vest Names New Partner
Fiduciary
Vest Names New Partner
Evan
Melcher has joined FiduciaryVest,
a boutique institutional investment consulting firm, as a partner.
He will assist his team in helping fiduciaries
build and maintain retirement plans overseeing investment pools of some of the
country’s largest corporations, hospitals, non-profits, foundations and
endowments. Melcher is also on the Board of Directors and currently serves as
the president of the ASPPA Benefits Council of Atlanta. He is a regular speaker
at conferences and conventions, and has written articles related to fiduciary
responsibility, fee disclosure, best practices for plan committees, and other
defined contribution (DC) topics.
“We are very grateful for the growth our firm has experienced
over the past few years,” says Philly Jones, managing partner. “Such
growth does not occur without talented and motivated leaders such as Evan
Melcher. Both personally and professionally, Evan embodies our firm’s values of
integrity, service excellence and thought leadership. We all celebrate with
Evan his notable accomplishments.”
NEXT: Deutsche Bank Expands Global Products and Solutions Team
Deutsche Bank Expands Global
Products and Solutions Team
Mike Isikow has been named the head of private markets of the Global
Products & Solutions team within Deutsche Bank Wealth Management. He
will head a global team responsible for providing illiquid assets including
private equity and co-investments across all asset classes to ultra-high-net-worth
clients.
Isikow joins
the bank from Credit Suisse Wealth Management, where he most recently led the
Private Equity Product Management team responsible for selecting and providing
private equity funds to private bank clients. Beforehand, he worked at
Donaldson, Lufkin & Jenrette; as well as at Cleary, Gottlieb, Steen &
Hamilton, and JP Morgan & Co Inc.
“Our clients
are increasingly looking for the ability to invest in alternatives to
traditional stocks and bonds as part of their strategic allocation,” says Bernd Amlung, Global Head of GPS at
Deutsche Bank Wealth Management. “Mike spent more than two decades working
in the private equity industry, developing products and tailored solutions for
clients, and we are happy to welcome him to our team.”
NEXT: NFP Expands Leadership Team
NFP
Expands Leadership Team
Insurance broker NFP
is growing its leadership team with the promotion of Bill Austin to president of
the Northeast region.
Austin will be responsible for overseeing benefits,
and property and casualty insurance. Before assuming his new role, Austin led
the region’s employee benefits, retirement and HR services consulting
businesses. Prior to this role, he co-founded AGS Benefits Group and Alterity
Group, which were both acquired by NFP in 2012.
“As our business grows and evolves, we rely on strong
regional leaders to promote each of our unique capabilities,” says NFP CEO Doug Hammond. “We’re excited to
leverage Bill’s expertise to bridge communication across the business and
contribute to our collective success as we think and act together as one NFP.”
NFP Corp. is an insurance broker and consultant that
provides employee benefits, property & casualty, retirement and individual
private client solutions through licensed subsidiaries and affiliates.
NEXT: AndCo
Consulting Names New Chief Compliance Officer
AndCo
Consulting Names New Chief Compliance Officer
Matthew
DeConcini has been named the new chief compliance officer of AndCo
Consulting, the institutional investment consulting firm formerly known as The Bogdahn Group. He will be
responsible for ensuring that the company and its employees meet all regulatory
requirements imposed by the Securities and Exchange Commission (SEC), the Department of Labor (DOL) and state promulgated regulations, while
also making sure internal procedures and policies are followed.
“It is an honor and a privilege to join one of the
best and fastest growing independent investment consulting firms in the
country,” says DeConcini. “I look forward to working with my new team
members at AndCo in putting our clients first and enhancing our compliance
program to be the gold standard in the industry.”
DeConcini brings to his new role more than 20 years of
experience navigating the legal and compliance frameworks of the industry. His
past roles include assistant general counsel at the International Union of
Operating Engineers, fund counsel at the Bakery and Confectionary Union Pension
Fund, and chief compliance officer and general counsel at Marco Consulting
Group.
DeConcini will be replacing Richard Spurgeon, CFA, who
was the firm’s Chief Compliance Officer. Working closely with DeConcini,
Spurgeon will serve as a compliance analyst.
NEXT: Beltz Ianni & Associates Expands Retirement
Services
Beltz
Ianni & Associates Expands Retirement Services
Kyle
Dunn
has joined Beltz Ianni & Associates
as a client services manager. He
will focus on retirement plan services while supporting the personal and
business services groups. He brings to his new position more than seven years
of experience as a financial services professional specializing in a variety of
wealth management services.
"Kyle will be a valuable resource for our
clients,” says Beltz Ianni &
Associates partner Bob Judd. “He has the capacity to listen to their
concerns and offer goal-oriented guidance that helps them make good financial
decisions. Kyle is as a great addition to our growing team."
Dunn joins the firm after working for MassMutual
Financial Group. He earned a bachelor’s degree in economics and business
strategies from the University of Rochester.
Founded in 2001, Beltz
Ianni & Associates is a financial services firm with a focus on retirement
planning.
NEXT: Fiduciary
Benchmarks Joins the Retirement Advisor Council
Fiduciary
Benchmarks Joins the Retirement Advisor Council
The Retirement
Advisor Council has brought on Fiduciary
Benchmarks(FBi) as one of its
five associate members. Founded in
2007, FBi focuses on delivering an effective independent benchmarking service
to help providers and the plan sponsors they serve meet their duties under
the Employee Retirement Income Security Act (ERISA). Recently, the firm utilized its DC methodology in the IRA space in an
effort to meet compliance challenges posed by the Department of Labor (DOL)’s
Conflict of Interest rule. It also addressed FINRA 13-45.
“We are honored and excited
to be joining a group of retirement plan advisers and service providers who are
getting out in front of the critical issues facing our industry,” says Craig
Rosenthal, senior vice president of marketing, sales and service. “We share the Council’s mission to highlight the
professional retirement plan adviser’s role in driving successful plan and
participant outcomes and look forward to participating and collaborating with
the other members.”
The Retirement Advisory Council is a national
organization advocating for the success of qualified plans and participants
saving for retirement by collaborating with advisers, investment managers, DC
plan service providers and other stakeholders in the retirement planning
industry.
NEXT: Northern Trust Hires Head of New Department
Northern
Trust Hires Head of New Department
Melanie
Pickett has joined Northern
Trust as head of Front Office
Solutions. This new department within asset servicing focuses on meeting
the operational and technology needs of complex asset allocators across the
globe. It will aim to bring innovative capabilities across data aggregation,
data enhancement and data analytics to support clients in their informed
decision making and investment execution.
Pickett will lead a team focused on leveraging
Northern Trust’s global resources to build solutions that meet the demands of
the in-house investment teams.
She brings to her new role more than 15 years of
experience in various senior operations and technology roles which included a
stint as chief operating officer for Emory Investment Management. Picket also
spent more than a decade managing technology strategy for the Global Wealth
Management group of Morgan Stanley.
She earned a bachelor’s degree from the University of Georgia and an Executive
Masters of Technology Management, a joint degree granted by the Wharton School
of Business and the University of Pennsylvania School of Engineering and
Applied Sciences. She is also a Chartered Due Diligence Analyst (CDDA), and a
founding Advisory Board member of the Investment Management Due Diligence
Association (IMDDA).
“Having spent her career designing and executing large-scale change within
financial services organizations, Melanie is a tremendous addition to our
team,” says Pete Cherecwich, president
of Corporate & Institutional Services at Northern Trust. “The needs of
global asset owners and allocators have changed dramatically over the last
decade and continue to rapidly evolve. It is critical we lead with a
forward-looking operational and technology solution, combined with a
first-class service offering to meet a complex set of investor expectations—especially in the highly challenging area of alternative investments.”
NEXT: Drinker, Biddle Opens Dallas Office
Drinker,
Biddle Opens Dallas Office
Twenty three new lawyers will walk through the doors
of Drinker, Biddle and Reath’s new office in
Dallas, Texas. The office will be led by nine partners.
E. Paul Cauley, Jr. serves as lead national and regional counsel for
businesses in class action, products liability and commercial litigation. Susan E. Egeland has defended hundreds of cases from
inception through resolution by dismissal, settlement or trial. Her litigation
experience stretches across numerous industries including the defense of
product manufacturers, corporations, insurance companies, financing
institutions, premises owners, and individuals in product liability and
business litigation. Travis S. Gamble represents clients in civil
litigation with a focus on personal injury, products liability, construction
and traffic control litigation.
Wayne B. Mason is a veteran trial attorney who
regularly defends national and international clients in diverse litigation
matters around the country. His focus is on class action litigation. George S. McCall has more than 37 years of experience
representing clients in commercial insurance litigation, insurance coverage
disputes, and extra-contractual claims.
Dawn S. McCord represents companies in state and
federal courts throughout the country in high-stakes class action and
multi-district litigation. W. Neil Rambin has more than three decades of
experience representing clients in complex commercial insurance litigation,
insurance coverage disputes, extra-contractual claims and disputes between
insurance and reinsurance companies.
Sondra S. Sylva advises clients in matters involving
casualty coverage, commercial insurance litigation, bad faith, property
coverage, environmental coverage, marine coverage and reinsurance. Alan R. Vickery provides counsel to large
pharmaceutical and medical device manufacturers. He focuses on complex
litigation and serves as state, regional and national counsel in mass tort
litigation.
“Our new lawyers are joining us from Sedgwick LLP’s
Dallas office and are renowned in Texas and nationally for their business
litigation, products liability and class action capabilities in industry
sectors such as automotive, insurance, pharmaceuticals, life sciences, and
health care,” reads a company statement. “They are intimately familiar with the
Texas legal market and bring significant experience to our Dallas office from
the outset.
NEXT: Empower
Retirement Names Leader of Government Market Segment
Empower Retirement Names Leader of
Government Market Segment
Daniel Morrison has been appointed to head of the government market segmentat Empower Retirement. Since joining the firm in 2003, Morrison has lead
several sales and service leadership roles for the company’s not-for-profit
business. As head of this department, he was responsible for overall sales and
retention in the company’s growing book of health care, education, faith-based,
and other non-profit plan sponsors.
He was also
sales director responsible for large and mega not-for-profit, health care,
church, education, and corporate retirement programs. Prior to joining Empower,
Morrison was an assistant vice president at Merrill Lynch.
“Dan is the
ideal leader who can provide the strategic vision, thought leadership and
expertise to help government plan sponsors best serve their retirement plan
participants,” says Empower President
Edmund F. Murphy, III. “Workers in public defined contribution plans
deserve the best opportunity for a secure retirement, and under Dan’s
leadership Empower will continue to serve their needs.”
Morrison
serves on the Denver Metro Chamber of Commerce (DMCC) Healthcare and Education
committees and is a Craig Hospital PUSH committee member, which raises funds to
support the hospital’s programs and research.
He graduated from the University of Vermont with degrees in mathematics
and English.
NEXT: New Partner Joins ESOP-Focused Law Firm
New
Partner Joins ESOP-Focused Law Firm
Steiker,
Greenapple & Fusco P.C. has named Paul S. Fusco as a partner to the firm, which was formally known as
Steiker, Greenapple & Croscut P.C.
This law firm focuses on Employee Stock Ownership
Plans (ESOPs) and other employee-centered ownership transition and compensation
strategies. Fusco joined it in 2013. He’s experienced in advising corporations,
shareholders, directors and ESOP trustees on a variety of ESOP-related issues
including transactional and non-transactional. He’s also assisted clients with
the design and implementation of non-qualified deferred compensation plans
including stock option plans, stock appreciation right plans, phantom stock
plans, performance-based plans and restricted stock plans.
"We have been thrilled to have Paul as a partner
and greatly respect his work, his commitment to employee ownership, his
commitment to his clients, his commitment to his partners and his commitment to
the ESOP community," says chairman
and CEO James G. Steiker.
Fusco graduated summa cum laude from the State
University of New York at Albany; and J.D. cum luade from the State University
of New York at Buffalo Law School, where he served as an articles editor for
the Buffalo Law Review. He's a member of the New York State and Monroe County
Bar Associations, The ESOP Association and the National Center for Employee
Ownership (NCEO). He is admitted to practice in New York and before the United
States Tax Court.
NEXT: Strategic
Investment Hires New Manager
Strategic Investment Hires New
Manager
Rick Behler has joined the Strategic Investment Group as managing
director on the relationship management team. He will serve the firm’s 29
clients with the help of a team of five senior professionals.
Behler joins
Strategic Investment from Hirtle Callaghan & Co., where he served as a
portfolio manager and serviced the firm’s largest institutional clients. Prior
to that, Rick was managing partner and senior portfolio manager at Chartwell
Investment Partners. He also worked as managing director and portfolio manager
at Morgan Stanley Investment Management, and as a Hedge Fund Manager for Moore
Capital Management.
He earned a
Ph.D and a master’s degree in economics from the University of Notre Dame. He
received his bachelor’s degree in economics from Rick Villanova University.
“Rick brings four decades of investment
knowledge across private and public markets, along with client service
expertise from an OCIO serving large institutional portfolios,” says Brian Murdock, president and CEO of
Strategic Investments. “He has worked with colleges and universities,
health care systems, corporations, foundations, and insurance companies with a
variety of asset pools. He will be a valuable addition to our team and is
superbly qualified to deliver the world-class client service that has helped
Strategic build enduring partnerships with our clients.”