Hello and welcome to this week's edition of 401k Real Talk. This is WealthManagement.com's Fred Barstein Omnichannel RPA Contributing Editor & CEO at TRAU, TPSU & 401kTV – I Review everything from the past week's stories and pick out the most relevant and interesting ones, providing an open and honest discussion that you wouldn't get anyway. So let's get real!
The brokerage and insurance industries are complaining about the fact that OMB has been quick to follow the DOL's fiduciary rule announcing that it has completed its review which means the rule will come out sooner than anticipated.
And while lawsuits are likely, the financial services industry can't wait to make changes in the hope that courts will loosen the rule as they have in the past. A recent U.S. Supreme Court rule has made it more difficult for litigants to judge buyouts, although they can obviously buy the district that is usually in Texas.
The D.C. industry has largely approved the rule that would make all advisers plan level fiduciaries, while critics question why the DOL is holding jurisdiction over IRA rollovers and insurance products that they claim the SEC and state regulators can to treat them.
It's a law that never dies. Until it happens.
Pontera announced a host of new hires to focus on partnership with record holders. They have essentially flown under the radar by allowing wealth advisors to manage their clients' DC accounts by acting as a cyber shield using client credentials without the permission and often knowledge of the data keeper.
The new hires have deep industry experience with firms such as Edelman Financial Engines, Fidelity, Principal, Voya and MassMutual, who will try to navigate the regulatory and technology issues that data holders may raise.
Regardless, people who want their advisor to manage their 401k accounts should be able to do so as the inevitable convergence of wealth and workplace retirement marches on.
Wharton Vice Dean Mauro Guillen at a recent 401k industry conference pointed out wealth and societal trends that will dramatically change the pensions industry including: 53% of retirees return to work not only because of money
The U.S. population is aging—there are now 3 working-age people for every retiree compared to 5 previously, meaning the shift away from government-funded plans will not only increase DC plans in the U.S., but change the rest of the world.
Women are playing a bigger role, who now have more wealth with an increasing percentage being the main breadwinner. However, the birth rate for educated women is now only one.
Overall, Guillen recommends that we rethink retirement in part because of the longevity revolution, noting, “The future belongs to those who can integrate the wisdom of age with the dynamism of youth.”
The revelation about financial wellness versus results and commitment has many questioning whether offering personalized financial planning to the masses is a pipe dream. Coupled with the limited commitment and cost of helping the less affluent, the results have been discouraging. Does the defined contribution model offer unique opportunities to deliver advice to the masses something that the B-to-C model that digital robo-advisors have proven to be economically unsustainable?
Read my latest WealthManagement.com column about how a TDF provider in partnership with a wellness firm and an advisor may have found a model that works for the masses.
So those were the top stories from last week. I listed a few others that I thought were worth reading:
Please let me know if I missed anything or if you would like to comment. Otherwise, I look forward to talking with you next week on 401k Real Talk.