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 offering an open honest and candid discussion that you wouldn't get anyway. So let's get real!
Almost immediately after OMB published the DOL fiduciary rule with parts that became effective on September 23rdstor the lawsuit was filed by the American Consumer Choice Federation representing pension and insurance firms in a U.S. District Court for the District of Texas, the same district where the earlier rule was denied, asking the court for a preliminary injunction.
Reports are that FSI, which represents brokerage firms, will either join or file their lawsuit.
Meanwhile, acting DOL Secretary Su came under fire from Republicans over the rule at a congressional hearing demanding her immediate resignation.
Questions remain about whether firms can wait to begin changing policies and procedures and what will happen if Republicans win the White House and choose not to defend the rule, which will be easier than repealing it.
of the labor market cooled in April reporting a healthy 175,000 new jobs, up from 303,000 in March with unemployment rising but still below 4% led by the Education and Health sectors which added 95,000 positions. Business services fell by 4,000.
Some pundits called it the “Goldilocks Report” — not too hot and not too cold — with some hoping it will lead the Fed to finally cut interest rates, which they've held steady recently because of concerns about inflation.
Although we can no longer call this a war for talent, there is still pressure on employers to hire and retain the right workers with retirement plans a key strategic weapon.
JP Morgan reported a data breach to the Maine Attorney General, which affected sensitive information about 451,000 plan participants, including Social Security and bank routing numbers.
Like the previously reported data breaches, the culprits this time were third parties employed by or agents of the bank's customers who did not have the right to see the data.
More to come as participants and providers deploy more third parties to help manage participant plans and assets.
Having successfully adopted the practices of their advisors, LPL announced a $400 million fund to acquire external practices called “liquidity and continuity” closing in on their first purchases. Deals are typically 8-10 times EBITDA committing $10-20 million with the firm committed to supporting the next generation of advisors.
LPL added over 1,300 new advisors last year, which now totals over 22,000. Look for other independents to further fuel the already hot advisor M&A market.
As small and mid-sized defined contribution plan sponsors wake up, finding people and service organizations they can trust becomes critical.
These plan sponsors are in difficult positions, most of them thrown into their jobs with little or no training and limited resources still trying to understand the roles and responsibilities of advisors, data custodians, TPAs and companies. funds. At this stage of awakening, the focus is on competence and knowledge, but as they become more aware and comfortable, they will ask, “Who can I trust?”
Read mine The last WealthManagement.com column how RPAs are at the heart of the transition and, if they can earn the trust of customers, there's no limit to where these relationships can take driving wealth convergence and retirement at work.
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.