No, advisers themselves aren’t getting smaller, it’s just that their numbers are. More of them are leaving the financial planning industry as reported by Plan Adviser citing a new report by Cerulli Associates, a research firm specializing in the financial service industry. Cerulli’s Edge Advisor Recruiting Edition says that the number of financial advisers in the U.S. declined from … Continue Reading
The phrase,"What we’ve got here is (a) failure to communicate" is, of course, the famous line from the 1967 film Cool Hand Luke starring Paul Newman. The quote is attributed to "Captain, Road Prison 36," who was played by the late, great American character actor Strother Martin. It’s become so much a part of the … Continue Reading
View larger image. Lost in the mass media focus on the Baby Boomers retiring is Generation X, the generation that follows. Depending on how they are defined, it’s the people born between 1965 and 1985 (age 23 to 43). I’ve written about them before, Not my generation that nobody seems to want. The "nobody" referred … Continue Reading
Last week Steve Rosenberg on his insightful Boston ERISA Law Blog tells us that Legal Rights That Are Protected In Courts, May Well Be Lost In An Arbitration. Steve comments on a recent Supreme Court case that parties may not contract among themselves for judicial oversight of an arbitration award under the Federal Arbitration Act. … Continue Reading
I’ve got that queasy feeling again in my stomach. The recent collapse of Bear Stearns gave me flashbacks to the 1990s during which we struggled with insolvency issues affecting ERISA plans. If you were around back then, you’ll remember the insurance companies that failed or were seized by insurance regulators as a result of failed … Continue Reading
Retirement plans in the U.K. and this country are a lot alike. Employers in both countries have shifted from defined benefit plans to defined contribution plans. Employers in both countries use a trust-based system complete with fiduciary responsibilities. And employers in both countries are understandably trying to limit their exposure to fiduciary liability. U.K. employers, … Continue Reading
This is one of those Good News/Bad News stories. The Wall Street Journal on March 27 reported that “Household Wealth Rises as Retirees Age” citing a paper posted on the Federal Reserve’s website. The Journal quotes the authors as saying that adjusted for inflation, The median’s household’s wealth declines more slowly than its remaining life … Continue Reading
Add one more trend to Boomer demographics. Recent research has revealed that Boomers continue to push the limits regarding the prevalence of divorce. While just 33% of married adults from the two preceding generations has experienced a divorce, almost half (46%) of all married Boomers have already been divorced. They will be almost certain to … Continue Reading
That’s Basil Rathbone, of course, portraying Sherlock Holmes, in one of the many reruns of the Holmes’ movies I used to watch as a kid on Sunday mornings on our non-flat screen, non-color TV set. Little did I know that years later he would add to the growing research on expert behavior. It’s an important … Continue Reading
The Lawrence Berkeley National Lab calls KEVLAR® the "Wonder Material" on it’s website because of its strength. The material is used by law enforcement, the military, and by civilians. Police wear bulletproof vests made of KEVLAR® which we know from watching cop shows. The U.S. Navy uses KEVLAR® cables to support sonar facilities to find out how much … Continue Reading
Just to your left is a picture of one of the 10 vehicles damaged in a parking lot at a hospital by a fire that started in the trunk of someone’s car. Fire firefighters suspect that fumes built up inside the trunk and were ignited by an electrical source, such as the taillights or brake … Continue Reading
One of those wonderful tax benefits that a qualified retirement plan and IRA provide is the tax deferral of contributions and earnings. But nothing lasts forever including the payment of benefits (and the taxes thereon). So the tax laws require RBDs and RMDs. That’s tax talk for “required beginning date” and “required minimum distribution” respectively. … Continue Reading
It starts tonight, the 2008 NCAA Men’s basketball tournament (the play-in game between Mt. St. Mary’s and Coppin St. with the winner having the dubious honor of playing North Carolina on Friday). And a lot of money is going to be lost. No, not just by most of the bettors, but by employers whose employees will be … Continue Reading
See full-size image. “Decumulation”, in definitional terms, means the conversion of pension assets accumulated during an employee’s working life into pension income to be spent during retired life. But in practical terms, decumulation embodies a significant new risk for the record number of future retirees moving from the accumulation phase of their lives to the … Continue Reading
I had never heard the term "orphaned 401(k) accounts" until I came across the survey, Competing in the Retirement-Dominated Future, which I referenced last month in my post, Banks Lag Far Behind in Race for Boomers’ Retirement Dollars. The survey used the term in referring to those 401(k) accounts still held in plans of previous … Continue Reading
We had been waiting for this for some time: a safe harbor rule for the time by which retirement plan sponsors must deposit employee 401(k) contributions. On February 28, 2008, the Department of Labor (DOL) announced that employee contributions to a "small"retirement plan (one with less that 100 participants) will be deemed to be made … Continue Reading
That’s the title of yesterday’s post by Eve Tahmincioglu on her blog CareerDiva. Eve writes about the disturbing trend of more 401(k) participants taking out loans. I’ve written about it myself, 401(k) Participant Loans on the Increase, But Not Always a Good Thing to Do. Here’s what Eve has to say about it: Looking for … Continue Reading
They’re back! They’re employees who back in the day we called "rehires", those former employees who were hired back. Now they’re called "boomerang employees". Diane Stafford, the Kansas City Star’s workplace columnist, writes about the trend for employers to re-hire former employees as reported by Management Recruiters International, an executive search and recruiting firm. In … Continue Reading
See full-size image. It didn’t get quite the attention that did the landmark Supreme Court ruling in LaRue v. DeWolff that defined contribution participants can bring fiduciary breach suits to recover individual damages. The "it" is the Department of Labor’s recent Field Assistance Bulletin (FAB) No. 2008-01, and it’s long-term implication may be as profound. … Continue Reading
That’s the message provided by a recent study released by the Center for Retirement Research (CRR) at Boston College. According to the study, 44% of Baby Booomers (people born between 1946 and 1964) and Generation Xers (people born between 1965 and 1974) are "at risk" of being unable to maintain their standard of living in … Continue Reading
The retirement market is in the trillions, but banks will have to play catch-up to acquire a significant share of those dollars. According to a recent survey, only 14% of “mass affluent consumers” cited their banks as primary providers of retirement services, compared to 53% for investment and brokerage firms. And in the past year, … Continue Reading
See full-size image. If you’re confused about the various types of designations in the financial service marketplace, you’re not alone. Even the financial service industry and the regulators are having a hard time making sense of the alphabet soup of designations. The American College, a non-profit institution that provides financial services education, has been tracking … Continue Reading
While most investors these days are focusing on risk in terms of the market and its effect on their account balances, Tim Burns in his blog, Fiduciary Investor, says that they should pay attention to a larger risk. It’s longevity risk, or the risk of a retiree outliving his or her assets. Mr. Burns, in … Continue Reading
Wealth manager, Russ Bailyn, in his Financial Planning Blog asks employers to consider the benefits of a Roth 401(k). Russ looks at it from the standpoint of the employee. Ours is with the employer, and unfortunately, it’s been slow going with plan sponsors adding a Roth provision to their 401(k) plans available since 2006. The … Continue Reading
