Fiduciary Advisers and the Pension Protection Act

A December 12, 2006, financial-planning.com article reports that "[n]early 90% of advisors polled in a recent survey said they planned to give investment advice to retirement plan participants, yet only one-third of them said they understood the fiduciary responsibilities involved." This report is problematic insofar as the effective date of the investment advice provision of the PPA is December 31, 2006. Moreover, the same article reports that "[m]any advisors polled believe the Pension Protection Act will boost their business from retirement plan sponsors [and that] [s]ixty-nine percent of respondents expected work from plan sponsors to help grow their business between 10 and 49 percent over the next three years." We expect a wave of advisers and their affiliates scrambling to make sense of the investment advice provisions in the coming months. Fortunately, E&W has already synthesized this information into plain English and developed a series of recommendations to ensure your practices are compliant with the PPA.

There are several considerations that must be addressed before giving advice to plan participants and many of these issues will need to be raised and blessed by your compliance departments. For example, tough fiduciary and disclosure safeguards must be met. Investment advisers who fail to adhere to these requirements are subject to civil and criminal penalties by the Department of Labor and may be civilly liable to the participant. For a brief article outlining the necessary disclosures and fiduciary standards, click here. And for a detailed discussion and slideshow, click here to download our most recent Webinar.

Welcome

Welcome to the West Coast Securities Law Blog hosted by Jason C. Roberts, Esq. and Edgerton & Weaver, LLP. Our blog will officially launch on January 1, 2007. Please check back with us next year. Thank you.