Fi360 '10 investment advice session

401(k) Participant Advice: How to Protect Your Plan Sponsors and Yourself Managing the Fiduciary Risk of Individual Advice

Legislative/Regulatory Overview  The History of Advice  Jason Roberts, Partner:  „01 SunAmerica Opinion Reish and Reicher  PPA Fiduciary Adviser  January „09 DoL Opinion  February „10 DoL Restatement

Advice in Practice Managing Risk in Your Practice and for Plan Sponsors

Managing Risk In Your Practice Mike DiCenso, AIF, National Is It Real or a Myth? Practice Leader: Gallagher Retirement Services  Total ERISA Plan Settlements in „08 by Category  DoL Monetary Recovery in ERISA Plans „09  Recent Lawsuits Against Advisors  Steps to Manage Risks

Amount Spent Worldwide On A. Home Furnishings B. Cell Phones C. Take-out Coffee D. Fine Art

Countries ranked in descending order based on: A. Per Capita Car Ownership B. Hours spent reading annually C. Home Square Footage D. Avg Weekly (gov‟t) retirement benefit

Metropolitan areas ranked by: A. 1-yr decline in median home price B. 3-yr decline in newspaper circulation C. 5-yr decline in tourism D. 10-yr decline in motor vehicle fatalities

Who is #61727-054  Bernie Madoff  This is why making sure you are acting in an ethical manner and capacity as a consultant and/ or Fiduciary is so important

Dollars Spent On A. Bank Bailouts B. Senate Earmarks C. ERISA Settlements D. Grande Lattes

What does this number Represent: $1,3000,000,000  Amount of DoL Monetary Recovery in 2009 through:  Voluntary Compliance Programs  Plan Assets Restored  Prohibited Transaction Corrections

Types of Litigation Breach of Fiduciary Duty 100% Adherence to Plan… 75% Remedies 70% Prudent Man 69% Prudent Man Standard 69% Interference with Benefits 65% Loyalty 62% Standard of Review 61% Contributions 59% Exclusive Purpose 55% Material… 37% Self Dealing 32% Two Hat Doctrine 29% Conflict of Interest 29% Prohibited Transactions 24% Investment Procedures 22% Duty to Disclose 22% Failure to Monitor 21% Party of Interest 19% Personal Liability 18% Preemption 13% ESOPs 13% Discrimination 10% Duty to Diversify 8% Top Hat Plan 5% Withdrawal Liability 3% Statute of Limitation 3% 0% 20% 40% 60% 80% 100% Percentage of Cases Source: Pension Litigation Data.com, ERISA Litigation Study , April 2009

Managing Risk for Plan Sponsors Managing Risk for Plan Chad Griffeth, AIF, Co-Founder Sponsors and President, BeManaged  What are the Risks for Plan Sponsors  What the “F” Word Means to Plan Sponsors  Types of Fiduciaries  The Regs  The Fiduciary Safe Harbor

Revenue and Cost Considerations  Motivation for providing  Scott Holsopple, AIF, participant advice – President of Smart401k  In-house v Outsource  Compensation Model  Impact on Your Cost Structure  Things to keep in mind  Evaluation Method  Prohibited Transactions

Outsourcing Participant Advice Should You or a Third Party Take That Risk?

Outsourcing Options – Who Should Take the Risk – You or a Third Party?  Outsourcing Advice to  Jason Roberts, Partner: Mitigate Risk Reish and Reicher  Risks v Benefits  Must consider ability to manage risks inherent to various provisions required to delivery safe harbor and avoid prohibited transactions if with B/D

Smart401k Overview  Independent Investment  Scott Holsopple, AIF, Adviser President of Smart401k  Acknowledged Fiduciary  Solely focused on participant advice  Advice & Managed Portfolios  Unlimited access to team of IARs  Targeted communications & education program, GAP analysis

BeManaged Overview  Independent, Unbundled  Chad Griffeth, AIF, Third Party 401(k) Advice Co-Founder|President, and Account Mgmt BeManaged Solution – 100% Focused  Participant IPS, ongoing advice/mgmt, customized updates, and Personal Annual Review  PPA Fiduciary Adviser Safe Harbor  Available to deliver direct or as “advice back office” for advisors

Q&A  Managing Risk In Your  Outsourcing Questions Practice and For Plan Sponsors

Contact Information  Jason Roberts, Esq.,  Scott Holsopple, Reish & Reicher Smart401k  jasonroberts@reish.com  sholsopple@smart401k.com  (310) 478-5656  (913) 744-3378  Mike DiCenso, AIF,  Chad Griffeth, AIF AJ Gallagher BeManaged Retirement Services  cgriffeth@myactium.com  mike_dicenso@ajg.com  (616) 871-0751  (630) 285-4093

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Fi360 '10 investment advice session

by BeManaged on May 12, 2010

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Fi360 ’10 investment advice session — Presentation Transcript