The Labor Department plans to complete by September a fiduciary rule for retirement advice that takes into account a ruling by the 5th US Circuit Court of Appeals that vacates an earlier version. The department aims to make the rule compatible with the Securities and Exchange Commission's Regulation Best Interest.
Companies can reduce employee financial stress by setting up an automatic emergency savings account program that helps them create a rainy day fund for unexpected expenses, said Terry Dunne of Millennium Trust. Having savings can keep employees from taking money out of their 401(k) or other retirement accounts to pay for emergency expenses, Dunne said.
Outsourced chief investment officers are more likely to invest in alternative assets than their in-house counterparts, research by Cerulli Associates finds. OCIO service providers expect institutional investors to increase their allocations to a wide range of alternative asset classes while trimming traditional equity allocations, the research finds.
Hedge funds must prove they can not only deliver returns but also protect capital when the next downturn strikes, the Financial Times writes.
IRI and other retirement advocates have written senators imploring them to vote for the Setting Every Community Up for Retirement Enhancement Act in its present form. "We're talking to all senators about trying to advance the legislation," said Paul Richman, IRI's chief government and political affairs officer.
People saving for retirement who have contributed the maximum to 401(k) plans for the year but who want to put aside more money have options. Among them are annuities, health savings accounts and traditional brokerage accounts.
Sen. Patty Murray, D-Wash., and Rep. Bobby Scott, D-Va., have asked the Government Accountability Office to study the effect of financial firms' preparation to comply with the Labor Department's defunct fiduciary rule. They want the GAO to review how changes to product lines and compensation models have affected sales and revenue.
Cybersecurity, not the Security and Exchange Commission's Regulation Best Interest, is the biggest compliance issue facing financial advisors today, says attorney and compliance expert Beth Haddock. Advisors should understand technology instead of completely outsourcing it and consider having an IT professional on retainer, Haddock says.
A solo financial advisor can service only about 100 clients before he or she will need to add staff, which makes additional clients less profitable, writes Michael Kitces of Pinnacle Advisory Group. He recommends focusing on increasing revenue per client, which might mean replacing current clients with more affluent ones.
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