Two recent articles, one in the Wall St. Journal and one by NAPA Net, discuss letters between Assistant Secretary of Labor, Phyllis Borzi and Congressman Miller regarding the potential for prohibited transactions by pension investment consultants who recommend themselves as money managers. More specifically, the letters refer to investment collectives and trusts created by investment managers, that can be used within retirement plans. My company The issue is whether a plan fiduciary will have the capacity and fortitude to review and possibly fire oneself from said plan if need be. That answer should always be yes. Borzi’s letter speaks to advisors who are double dipping (i.e. being paid both as an investment manager and as a consultant), but it does not address any issues when the advisor is not being compensated for (or rebating) fees for investment management. That’s what we want to see discussed.
We’ve been able to get a hold of these letters – they’re attached below.
Napa Article – Advisor-managed Investments May Violate ERISA