Mutual fund companies seem to be willing to challenge corporate management on some governance issues, but there still is a way to go before they will be seen as pulling their weight.
Many Employee Retirement Income Security Act fiduciaries, including plan sponsors, trustees and members of investment committees, are unaware of their significant responsibilities relating to the prudent selection and monitoring of plan asset investments, and the proper operation of their qualified plans.
No matter how you are registered and regulated, you can’t afford to turn a blind eye to the breaches of your clients who are fiduciaries — investment committees of retirement plans, foundations and endowments, and trustees of personal trusts.
Courts and regulators will evaluate your effectiveness as an investment adviser against a process standard — as opposed to a performance standard.
As reported here last week, a federal appeals court has struck down the Securities and Exchange Commission’s broker-dealer exemption, stating that the commission lacks the authority to grant brokers broad exceptions to rules that apply to investment advisers.
One of the most pressing issues in the investment industry today is retirement plan fees and expenses. A lot of questions have been raised about them recently, all of which can be answered simply à la college basketball commentator Dick Vitale: “It’s about fiduciary responsibility, baby!”
