401(k) Specialist Issue 4 - 2016 - 6

3 Easy Ways to Get Sued or Sanctioned
EDITOR'S LETTER
401(k) ADVISORS REMEMBER the " alphabet soup " cliché associated with fly-bynight
industry designations from a few years back. Certified this and chartered that
had clients completely FUBAR©
before regulators (most notably Massachusetts Secretary
and Spitzer mini-me William Galvin) cleaned it up.
We now have a current equivalent.
" It's not alphabet soup, it's numeric soup and advisors are quick to bandy about the
3s, " says Roger Levy who, as CEO of Cambridge Fiduciary Services, is a well to which
we've frequently returned in recent months.
The 3s to which he refers are of course 3(38), 3(21) and 3(16), a Mobius strip of
industry confusion that finds advisors back where they started when attempting not
only to understand, but act on, the ERISA sections.
" All of this has advisors and plan sponsors asking questions, but are they getting
answers? " Levy rhetorically asks.
" It's absolutely the root of the tree. If you're talking about 401(k) advisors that are
subject to ERISA, it's the legislative fountain of their responsibilities and defines them
as fiduciaries, " he adds with a mix of metaphors.
401(k) plan sponsors don't want to be in the investment business, and are looking
to you for help. It comes down to three choices; understand, advise and/or outsource
the ERISA fiduciary services (and hence responsibility).
The issue skyrocketed in importance and recognition with the release of the
DOL's fiduciary rule, as well as low-fee lawsuits filed by Jerry Schlichter and the like.
Post-election pandemonium has many wondering if the former will survive a promised
regulation purge by the Trump administration, but no matter, the latter is here
to stay. Which means advisors better have a handle of what they mean and what they
will and will not do for clients who adopt each.
" Attendees aren't going to conferences simply for the sessions and exhibit hall
cocktails anymore, " one advisor told us. " They're looking to partner with other
individuals and companies willing to take on that fiduciary responsibility, and more
companies are showing up that are willing to do it. "
We mention a few resources in this month's cover story (including Levy), but
emphasize it's only a start. The turmoil is an indication of the incredible challenges
the industry presents, and as we've often repeated, the equally incredible reward for
those that figure it out.
The wait is over! Our CE Tests are here. Go to www.401kspecialistmag.com and
click the CE Test tab in the navigation bar to gain valuable continuing education
credit for ongoing CFP certification.
ONLINE
EXTRA
John Sullivan
Editor-in-Chief, 401(k) Specialist
6 ISSUE 4 2016 | 401kSpecialistmag.com

http://www.401kspecialistmag.com http://www.401kSpecialistmag.com

401(k) Specialist Issue 4 - 2016

Table of Contents for the Digital Edition of 401(k) Specialist Issue 4 - 2016

Table of Contents
401(k) Specialist Issue 4 - 2016 - Cover1
401(k) Specialist Issue 4 - 2016 - Table of Contents
401(k) Specialist Issue 4 - 2016 - 1
401(k) Specialist Issue 4 - 2016 - 2
401(k) Specialist Issue 4 - 2016 - 3
401(k) Specialist Issue 4 - 2016 - 4
401(k) Specialist Issue 4 - 2016 - 5
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401(k) Specialist Issue 4 - 2016 - Cover3
401(k) Specialist Issue 4 - 2016 - Cover4
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