Allen Steinberg : Perspectives

Employee benefit plans—especially retirement and health care—have become an increasingly important part of the employment relationship. For employers, these plans represent an important part of the total compensation package, a tool for retention and recruitment, and a growing financial and compliance burden. For employees, these plans represent a key part of their overall financial security and wellbeing, a financial burden, and a source of complexity and frustration. In effect, it’s complicated. Our firm is dedicated to helping employers manage these complexities and focus on the important things.

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John Enyart

01.08.2018 09.08 CDT

A recent study provides strong evidence that the financial industry implicitly tolerates adviser misconduct and that certain firms have created a secondary market for advisers who engage in misconduct.

Patterns of How the Financial Industry Tolerates Misconduct

This paper helps demonstrate how it is not enough for plan fiduciaries to rely on regulatory rules to protect against predatory behavior; as in so many horror movies, the predator is already inside the house.

Advisers FINRA Misconduct

A recent paper raises some important - and troubling - issues about how the financial industry treats advisers who engage in serious misconduct. The paper demonstrates how investment adviser misconduct is tolerated and how advisers who engage in misconduct are likely to be concentrated in certain firms.

Allen Steinberg

17.07.2018 10.34 CDT

At the core of the Administration’s actions to dismantle the ACA are actions that pull lives out of the risk pool; undermining the integrity of the ACA’s risk pools will undermine the stability of health insurance markets. This instability may prove to be yet another set of ACA-related headaches for employers.

Risk Pooling, Risk Shifting and Risky (Health Insurance) Business

It is difficult to measure the specific effects, of each of these actions, on health insurance markets. However, there is increasing evidence that the cumulative effects of these actions are reshaping health insurance markets in the United States.

ACA AHP repeal STLD

Over the past year the Administration has taken a number of steps that serve to undermine the ACA by facilitating the movement of covered lives away from plans covered by the ACA - by increasing premiums, by discouraging carrier participation in ACA exchanges and by reducing behavioral barriers to dropping individual coverage. These actions represent traps for employers caught in the middle of this slow-motion ACA repeal.

Allen Steinberg

05.06.2018 12.08 CDT

There is significant evidence that consumers are placing their trust - and their money - with financial professionals who have financial incentives that conflict with consumers’ best interests. It does not appear that the current debates over professionals’ standards of conduct will make real progress in addressing this issue.

Dancing on the Head of a Pin

Regulators and courts may focus on the different rules for “investment advisers” and “brokers.” But, in the real world, this distinction confuses investors and undermines consumer protections.

Broker Fiduciary Investment Adviser

There are key legal differences between investment advisers and brokers. However, consumers do not understand the implications of these differences. Consumers’ confusion is exacerbated by industry advertising, with references to “financial advisers,” “wealth managers” and “financial consultants” further blurring the difference between investment advisers and brokers.

Allen Steinberg

18.05.2018 09.49 CDT

Financial firms have both the opportunity and the financial motivation to move customers from employer-sponsored plans to individual products, such as retail managed accounts and annuities. An investigation of Wells Fargo bank may disclose whether the bank succumbed to the temptation.

Et Tu, Wells Fargo?

An investigation does not mean there was any wrongdoing by Wells Fargo.

Fiduciary leakage

Wells Fargo bank is reportedly under investigation for practices in the bank’s retirement plan division. The investigation apparently focuses on practices that may have been intended to move clients from employer-sponsored plans into more expensive individual retirement accounts when they leave their jobs. If these reports are accurate it may help shine a light on industry practices that contribute to plan “leakage.”

Allen Steinberg

10.05.2018 06.37 CDT

The SEC’s proposed new rules require broker-dealers’ obligations to act in customers’ “best interests.” The SEC proposal, in some ways, fills some of the gaps created by the recent court decision to invalidate DOL regulations expanding the definition of ERISA “fiduciary.”

The SEC Enters the Fiduciary Fray

The SEC has now weighed into this fiduciary fray, proposing new rules governing the behavior of broker-dealers.

Broker Conflicts Disclosures

The SEC has proposed new rules governing the behavior of broker-dealers. Under this proposal a broker- dealer “shall act in the best interest of the retail customer . . . . without placing the financial or other interest of the [broker-dealer] ahead of the retail customer.” The primary requirements of “best interest” are that broker-dealers disclose fee structures and not place their financial interests ahead of customers’ interests.