Lamb is Thompson Hine’s litigation practice group leader and is based in Cleveland. Plaintiffs lawyers have their sights set on a portion of the more than $5 trillion in assets held in U.S. 401(k) retirement plans.Litigation against plan fiduciaries — those responsible for investing, managing, administering and protecting 401(k) plan assets — is on the rise. The claims, which primarily arise under the Employee Retirement Income Security Act of 1974, or ERISA, challenge the prudence or diversification of plan investments or the reasonableness of fees paid by plans to third-party service providers, such as record-keepers and investment advisers.In 2017, ERISA class action settlements, many involving plan fiduciaries, reached almost $1 billion, with individual cases settling in the tens of millions of dollars each. Increasingly, plaintiffs are including boards of directors as defendants, arguing the board members are or ought to be treated as plan … [Read more...] about Adviser: Protect corporate boards from 401(k) claims
Investment advisers act
Matthew Dolan and David Jesse Detroit Free Press Published 10:00 p.m. UTC Jun 22, 2018 A former pension manager barred by the Securities and Exchange Commission helped convince his former colleague — the man who oversees the University of Michigan's endowment — to pour nearly $100 million into funds he represented. U-M's entanglement with the unregistered broker, which has not previously been reported, is seen by some critics as an example of what has long worried the university's watchdogs: a lack of sufficient oversight and robust due diligence to avoid conflicts of interest at one of the nation's largest college endowments. Among the broker's problems: a high-profile, federal criminal trial in which he was acquitted and a banishment by the SEC on accusations of associating with a kickback scheme. "This goes beyond the pale," said Richard Vedder, an economics professor emeritus at Ohio University who has studied the … [Read more...] about How a down-and-out broker got University of Michigan to invest $95M
A year ago, Gov. Wolf signed off on the General Assembly’s pension reform law. It is starting to affect your wallet, whether you’re a teacher, a trooper, or otherwise counting on state retirement checks. The law, Act 5 of 2017, doesn’t close the multi-billion-dollar gap between what the state has promised retired public workers, and what they’ve set aside to pay those pensions, which will have to be paid by the commonwealth eventually. It does stop the growth in that gap, which had depressed the state’s credit rating and forced taxpayers to pay millions extra in annual borrowing costs. It also slows the relentless annual cost increases that add more than 30 cents in pension payments, from every dollar paid to state and school workers in salaries, up from close to zero in the early 2000s. The law cut future obligations by ending the state’s guarantee to pay retired staff pretty close to what some of them made when … [Read more...] about Can Harrisburg insiders really find a better way to invest the state’s pension billions?
Correction: The original version of the Investment Advisers list incorrectly identified the top executive for CBIZ Retirement Plan Advisory Services. Brian Dean should have been listed as president. So what exactly is the difference between an investment adviser and a money manager? At a glance, the firms on our Money Managers list and Investments Advisers list might look similar. • TO SEE THE FULL LISTS, BECOME A DATA MEMBER In some ways, they are: Technically, the firms on both lists are all registered investment advisers regulated by the U.S. Securities and Exchange Commission or, for the smallest firms, by the state of Ohio. That means that they're all somehow engaged in providing advice related to investments and/or managing portfolios. And the "registered" part means they're legally bound to act in their clients' best interests. Making matters more confusing, some firms are hybrids, providing both money management and investment advisory services (more on that later). So, … [Read more...] about Lists: Money managers, investment advisers … what’s the difference?
The “Small-Business Credit Availability Act” was passed by Congress and signed by President Trump to ease assets-to-debt ratios from 2-to-1 to 1.5-to-1 for “business development companies” — BDCs, firms that bundle corporate debt into funds they sell to investors — writes S&P Global Rartings in a report last week. The sector includes South Philly-based FS Investment Corp., and rival BDCs owned by BlackRock, Texas Pacific Group, and 76ers owner Josh Harris’ Apollo Global, among other big firms. The change will “increase credit risk” in what is already a competitive business, writes the S&P analyst team, headed by Matthew Carroll. The new law makes BDCs no safer than “other nonbank finance companies,” Carroll wrote. That means S&P expects to drop most of their credit ratings from around BBB- to BB+, same as other nonbank finance companies, but a notch down from where they deserved to be when the rules … [Read more...] about Congress and the president have made BDC investments more risky: S&P
Financial advisers who provide individuals with investment advice for their IRAs, 401(k)s and other retirement accounts have new rules to follow starting Friday that are meant to protect investors from advisers' conflicts of interests. The Department of Labor's new regulation, known as the Fiduciary Rule, requires brokers, investment advisers and other financial professionals to base their recommendations on actions like rolling over your 401(k) to an IRA on what makes financial sense for you -- and not and just because your adviser wants a commission to increase his or her income. Considering the growing population of older workers with large balances in employer-sponsored retirement plans getting closer to retirement, the DOL saw a need to protect workers when they retire and take their assets from the plan. The DOL is the main regulator of employer-sponsored retirement plans, and all service providers to such plans are now required to act as fiduciaries. Beginning June … [Read more...] about A new rule for many financial advisers: The customer comes first
It’s pretty clear: Americans want their financial advisers to have their best interests at heart in making savings and investment recommendations. Unfortunately, many in the financial industry don’t want this responsibility, also known as acting in a fiduciary capacity. How federal regulators and the industry reconcile these conflicting views in the coming months will help shape the financial advice consumers get for years. According to a recent survey from Financial Engines, 93 percent of Americans think financial advisers who provide retirement services should be legally required to put their clients’ best interest first. However, 53 percent of those surveyed mistakenly believe all financial advisers are already legally required to do so. (Financial Engines is the nation’s largest independent investment adviser and is an institution that accepts fiduciary responsibility when making recommendations to its clients.) The Financial Engines survey is … [Read more...] about What you need to know about your financial adviser
Last Updated Feb 3, 2017 9:00 AM EST Under laws and regulations currently in effect, financial advisers aren’t obligated to act in your best interests when recommending investments for your retirement accounts and offering guidance on your retirement plans. Are you surprised to hear that? If so, you’re not alone: According to a survey conducted by Financial Engines, the country’s largest independent registered investment adviser, 46 percent of all Americans mistakenly believe that all financial advisers are fiduciaries and are legally required to put the best interests of their clients first when it comes to making recommendations on their retirement savings.The U.S. Department of Labor (DOL) issued regulations in April 2016 that would require advisers to act as fiduciaries when making retirement savings recommendations. The so-called “fiduciary rule” had been scheduled to go into effect in April 2017, but its future is in doubt. Responding to … [Read more...] about Who is your financial adviser really working for?
Jack in Scituate, Mass., is a 50-something friend of mine who has found himself thinking nonstop about his finances after a recent divorce, health problems and job change. So he went out and met with a financial adviser from a brand-name brokerage company and got some advice. And then he had second thoughts. He hadn’t done a background check on his new adviser, hadn’t gotten a recommendation from friends or family on who he might use, hadn’t asked for references, hadn’t interviewed other candidates. He just had a meeting, liked what he heard and signed up to follow the advice. And then he had second thoughts about it. Jack and I have known each other for years, and he is on the right track. He wants and needs some guidance to feel comfortable about his money, and good financial advice helps people achieve their goals. The problem is that bad advice costs people big chunks of money and leaves them worse off than if they had simply done it all on their own. … [Read more...] about Chuck Jaffe: Did you pick a good adviser? Here’s how to know
The Maryland Attorney General’s Office ordered Towson-based High Point Wealth Management to halt a business it runs from the former offices of a financial management company that faced penalties last year for fraudulently misrepresenting investment risks. The securities division of Attorney General Brian E. Frosh’s office accused High Point Wealth, High Point Insurance Solutions and co-founder and CEO Perry C. Santillo Jr. of selling unregistered securities, acting as an unregistered investment adviser, broker-dealer and issuer agent and engaging in fraud. The division issued a cease and desist order Friday against Santillo and his businesses. Santillo could not be reached Friday. Frosh said in an announcement that his office “acted swiftly to protect Maryland investors against further losses from recommendations made by an unlicensed investment adviser.” His office is seeking fines and to permanently bar Santillo and his company from doing business in Maryland. … [Read more...] about Maryland AG orders halt to Towson investment advisory in former Everest offices