Proposed DOL regulation should stick to disclosure

The Labor Department should go back to the basic purpose for this proposed regulation.

In response to the article “DOL’s 401(k) pitch strikes fear among financial advisers” (March 29): The Labor Department should go back to the basic purpose for this proposed regulation.

That purpose is to disclose fully the expenses associated with the assets in the retirement plan, including internal expense ratios, revenue sharing, management fees and any revenue that the broker or adviser receives from those funds.

This would provide full transparency to all plan constituents, which should ultimately lead fiduciaries to provide low-cost and efficient fund options to participants and weed out the misleading and conflicted financial advisers.

The need to dictate which investment theories should be used wouldn’t be necessary if plan fiduciaries had the appropriate information to compare apples to apples when reviewing funds and advisers.

Ironically, in the majority of asset classes and mutual fund families, the passive funds available will come out on top anyway, especially in longer-term measurements.

But as Linda Wolohan of The Vanguard Group Inc. pointed out in the article, there are actively managed funds with low costs and a disciplined approach out there.

So don’t dictate what can be bought; just help make buyers aware of what they are buying. Let the numbers speak for themselves as they pertain to the active-versus-passive debate, and center the focus on those taking advantage of unsuspecting investors.

As a fully transparent independent adviser, we talk to many prospects who at first glance assume that all the cost of our plan services are substantially higher than what they had been paying, until we take them under the hood of their current vehicle. Most often, they discover expenses that they never knew they were paying.

Some advisers feel that their only service (and perhaps their only value) to the plan is to pick funds; thus if there were a bias toward passively managed funds, the plan sponsor would not have a need for that adviser’s service. If that is the only value that they are bringing to the table, then it is true that their retirement plan business may be vulnerable.

Most plan sponsors need and should demand a “plan” adviser, someone who will assist them in not only designing an appropriate investment menu, but also helping them to meet their fiduciary responsibilities in maintaining a suitable plan while they are off running their businesses. Such an adviser should guide their participants in understanding the benefit that the company is providing, why they should take advantage of it, and how they can reach their retirement goals with the tools and resources that they have available.

Kim Cady

Financial adviser

Savant Capital Management Inc.

Rockford, Ill.

Consternation over use of the word ‘golfing’

I enjoyed the article “Driving for growth on the links” (April 26), pertaining to networking through playing golf.

I very much agree that even four or five holes with someone will reveal more about their character than years of meetings and casual interactions.

That being said, I just wanted to point out a common mistake with the conjugation of the verb “golf.” I am no stickler for grammar rules and frequently break them, but for some reason using the word “golfing” really irks me.

I apologize if you think this letter is in poor taste, but I really felt the need to bring the improper conjugation to light.

Thanks for the good read.

Robert Kneip

Analyst

Evaluation Consultants

Norwalk, Conn.

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