US - Wilshire Associates has rejected claims it has received contingency payment for referrals by Wilshire Analytics to BNY Brokerage on theback of continued concern from Democrat representative Edward Markey over use of the consultant by the PBGC.
Markey said in a recent statement: “I remain concerned that the PBGC, which is responsible for safeguarding the pensions of millions of Americans, maybe employing firms that the SEC has determined have conflicts of interest that could taint the objectivity of their investment advice.”
His concerns relate to a subpoena received by Wilshire from the Department of Labor (DoL) as part of its investigation into pension consultant conflicts of interest, on the back of which he wrote a letter to the PBGC querying the corporation’s use of Wilshire.
He added: “The PBGC’s response to our letter leaves open the possibility that its investment managers may have been identified by the department as having conflicts.”
Markey referred to Wilshire’s response to the SEC’s probe, in which the firm, when asked whether it had any arrangements with broker-dealers under which it or a related company would benefit if money managers placed trades for their clients with such broker-dealers, said: “Wilshire Associates has an incentive for referring Wilshire Analytics clients to BNY Brokerage and Westminster Research Associates broker-dealers for third-party agreements because Wilshire Associates may be entitled to contingent pay-ments from BNY Brokerage... Wilshire Associates’ potential revenue... could adversely affect Wilshire Associate’s (sic) objectivity.”
In October 2004, Wilshire sold certain assets of its former brokerage business to BNY Brokerage, agreeing to refer its Wilshire Analytics clients to BNY Brokerage as the preferred provider for the provision of third party agreements.
However Wilshire said in a statement: “We were not entitled to and did not receive any contingent payments for referrals by Wilshire Analytics to BNY brokerage for 2005 and we do not expect to be entitled to or receive any contingent payments in 2006. It is important to note that the referrals are limited to Wilshire Analytics clients only.”
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