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New Group to Go to Bat for Retirement Plan Advisers

Among other things, the National Association of Plan Advisors plans to fight to keep tax breaks for retirement savings.

September 29, 2011
Related Topics: Finance/Taxes, Customer Service, Benefit Design and Communication, Retirement/Pensions, Retirement Planning, Latest News

With federal regulators focusing on fiduciary duty for investment advice and fee disclosure, a new advocacy group has formed to boost the profile — and clout — of retirement plan advisers.

The American Society of Pension Professionals and Actuaries on Sept. 30 established the National Association of Plan Advisors. The group that will be comprised of advisers to employer-sponsored 401(k)s.

"No one is solely representing the viewpoint of advisers in that space," said Brian Graff, ASPPA executive director and chief executive.

Yet much regulatory activity is occurring in the retirement savings area. Two weeks ago, the Labor Department announced that it would withdraw a proposed rule that would have significantly expanded the definition of "fiduciary duty" for advisers to retirement plans.

The regulation drew strong resistance from a wide range of industry groups and bipartisan members of Congress, who targeted much of their ire at provisions that would, for the first time, apply fiduciary duty to IRAs. Critics said that the rule would have forced broker-dealers to abandon the IRA market.

Graff said that 401(k) advisers aren't as adamantly opposed to the Labor fiduciary rule. For instance, their central concern is that they don't want commission-based advice to be prohibited, as long as it is properly disclosed.

But they do have objections about much of the language in the original proposal and are going to try to influence the rewrite. The Labor Department has said it will re-propose the rule early next year.

"We're on the front lines of dealing with plan sponsors and plan participants every day," Graff said. "We know what's happening in the marketplace. So we can have a significant impact on how that regulation gets changed and works its way through the process. There's still a lot of work to be done."

On the legislative side, the group will try to shape the atmosphere surrounding major tax reform, which could begin in 2013. Both Republicans and Democrats have indicated they will look at limiting tax deductions and preferences for retirement savings.

Retirement plan advisers "have a great perspective on how important these incentives are, and that needs to be conveyed to Congress," Graff said.

There a "few thousand" advisers who specialize in 401(k) plans, he said, adding that he hopes many of them will join the new organization. "We've gotten a tremendous amount of initial enthusiasm," Graff said.

In addition to advocacy, the adviser association will provide access to industry expertise and networking opportunities. An adviser with a firm that is an organizational partner, such as ING Groep NV, would pay $195 annually for membership.

Another Washington group for financial advisers is stepping up its lobbying efforts. The Financial Services Institute Inc. announced yesterday that it has revamped its websiteto make it easier for its 124 broker-dealer and 27,000 financial adviser members to reach out to federal and state regulators, and lawmakers.

"This new and improved site will enhance our members' ability to forcefully advocate in Washington, D.C., and the states," Dale Brown, FSI president and chief executive, said in a statement. "Everything we do at FSI starts and finishes with advocacy."

Filed by Mark Schoeff Jr. of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail

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