An announcement this week that Fidelity is launching retail mutual funds with management expense ratios of zero basis points shows how asset managers are evolving to capture a greater share of a shrinking fee pool.
The new ruling in Barrett vs. Pioneer does little to resolve the fundamental issues at hand, offering some points of victory to both sides and implying a new amended version of the complaint is welcome and likely.
Although smart beta is still a small category with just $430 billion in AUM, or 0.5% of the global total, it has grown by 30% a year since 2012, according to Boston Consulting Group.
The court’s decision, which leaves room for an amended complaint, is based on questions of timeliness and a lack of standing, rather than on the facts of the relevant compensatory arrangements in place between the defendants.
Industry stakeholders immediately offered their thoughts on the complex regulatory saga that has surrounded the now-defeated DOL fiduciary rule; depending on their position in the industry and their particular client service philosophy, some providers are hailing this step as a victory, while others are bemoaning it.
Understanding the opportunities associated with 3(21) and 3(38) fiduciary services—and the key differences between them—can help ensure the best use of the retirement plan committee’s time and resources.
The mixed ruling grapples with binding circuit court guidance and reaches quite different conclusions regarding various allegations of prohibited transactions and fiduciary breaches.
Underscoring the victory for Northwestern University and potentially giving some hope to other similarly positioned defendants, all pending motions were denied and the case has been terminated.
Expense ratios of target-date mutual funds averaged 0.44% in 2017; since 2008, ICI explains, the expense ratios of target-date mutual funds have fallen 34%.
The Wisconsin Association of Independent Colleges and Universities announced a partnership with Transamerica to create a 403(b) multiple employer retirement plan specifically for its educational institution members.
A TDF may invest its assets into index-based securities that do not make tactical adjustments as the markets change—but the act of managing even an index-based portfolio according to a glide path that ramps down equity risk over time will always be at least in part fundamentally “active.”
The text of the complaint includes substantial detail about the inner workings of the Home Depot retirement plan, and its relationships with advice providers Financial Engines and, later, Alight Financial Advisors.
The central claim in the failed class action was that plaintiffs were forced to overpay significantly for advisory services; defendants successfully argued the plaintiff failed to state an actionable claim.
A district court has ruled that the complaint “does not sufficiently plead that the defendants were engaged in the conduct of an association-in-fact enterprise or that each defendant engaged in a pattern of racketeering activity.”
The fact that two U.S. Circuit Courts of Appeals, the Fifth and the Tenth, have issued conflicting rulings about the propriety of the DOL’s process in creating and implementing a stricter fiduciary standard, leaves the retirement plan industry with a number of challenging questions.
SEC-mandated regulatory filings from Wells Fargo Advisors have triggered state and federal inquiries into whether the firm’s advisers have made inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants.
Since the last study of this kind by CEM Benchmarking, average DB fund costs have increased from 0.40% to 0.60%, whereas DC plan costs have remained constant at 0.39%; overall, DB plans outperformed DC plans in the last decade by only 0.46%.