Oregon launched a program this summer requiring businesses without retirement plans to automatically enroll employees in state-run individual retirement accounts invested in mutual funds. Eight additional states are working on such initiatives, which are expected to face legal scrutiny as opponents argue they violate federal pension laws.
With more than 40% of US counties covered by only one Affordable Care Act provider and costs continuing to rise, experts say the future of the ACA exchanges is uncertain. Things are likely to stay the same in 2018, but changes could be in store in 2019 or in later years, experts say.
Principal Financial Group is rolling out a retirement modeling planner to help sponsors improve their plans. "Plan sponsors and their advisers can conduct automatic enrollment, auto-escalation and stretch-match formulas -- in real time with real client data -- to identify the most beneficial retirement solutions for their business and employees," said Jerry Patterson, Principal's senior vice president for retirement and income solutions.
The Pension Committee of the American Academy of Actuaries has proposed simplifying annual funding notices for pensions by narrowing their focus, providing narrative content and putting generic information only online. The group made the suggestions in comments to the ERISA Advisory Council of the Employee Benefits Security Administration.
Chris Eberly of the Novarica insurance IT consultancy has expressed an optimistic outlook on the future of the annuities business, claiming advisors and agents can look forward to simpler structures, faster delivery to market, more fee-based products and fewer riders and income guarantees. The days of "complex, tough-to-understand annuity products" are coming to an end, he said.
Firms have moved 10.2 million accounts and $900 billion in assets from commission-based brokerage models to fee-based advisory accounts since the Department of Labor's fiduciary rule went into effect June 9, according to a Securities Industry and Financial Markets Association-commissioned study. The move to advisory accounts will cost investors more money, the study found, with a 110-basis-point average annual increase in the cost of fee-based accounts compared to a 46-basis-point annual rise in brokerage accounts.
Morningstar executive Aron Szapiro says data auditing could be the key to enforcing the fiduciary rule's best-interest contract exemption. He outlines a scenario in which a neutral third party would compile data on clients' portfolios, scoring them on factors such as the cost of investments and quality, asset allocations and the extent of personalized advice given, then providing an automated decision on whether they are constructed in the clients' best interest.
As life expectancy increases dramatically, the role of financial advisors in longevity planning grows more crucial, writes Kimberly Foss of Empyrion Wealth Management. She lists factors for advisors to consider as they seek to add value to the planning process.
Author and wealth planner Chris White acknowledges the difficulties of advising risk-averse clients, which he refers to as "Protectors," as their attitudes can make them reluctant to make investments or portfolio adjustments and likely to withdraw hastily at any suggestion of market turbulence. White offers six suggestions for helping them overcome their concerns and make sound financial decisions.
Joseph Belth to receive the 2017 John Newton Russell Memorial Award
NAIFA is proud to announce Joseph M. Belth, CLU, Ph.D., editor of The Insurance Forum, as the recipient of the 76th annual John Newton Russell Memorial Award. The award is the industry's highest recognition of those who exemplify the standard of commitment to the life insurance industry. Read more at the Advisor Today Blog.