Asset managers will be able to give US based pension funds and their members investment advice, if a Bill introduced by Congressman John Boehner is passed.
The Retirement Security Advice Act would let fund managers offer advice to pension funds and their members, providing they disclose their fees and any potential conflicts of interest. Additionally, the Bill also states that investment managers would be liable for any failure to act solely in the interests of pension fund members, and will be subject to fiduciary standards under federal pension law.
The Retirement Security Advice Act, introduced by Republican John Boehner with bipartisan support, has so far been met with mixed reactions. The $278bn pension giant Teachers Insurance Annuity Association - College Equities Retirement Fund (TIAA-CREF) and the Investment Company Institute have warmly welcomed the bill.
According to TIAA-CREF, the bill will modernise the Employee Retirement Income Security Act (ERISA) to respond to the realities of the pension world. TIAA-CREF added that the bill was an important step forward in providing individuals with professional help and guidance as they evaluate their retirement security needs.
Others however, are less than enthused. According to Invesmart, a US retirement services firm, the bill will enable asset managers to advise pension fund members to pick investment options that would generate the most income for that particular manager.
Craig Kirsch, president & chief executive officer of Invesmart, said: We strongly oppose the Retirement Security Advice Act because it benefits retirement providers, not employees contributing to retirement plans. The losers here are pension plan sponsors and participants who could easily be subject to biased investment advice.
Invesmart is a retirement services firm that assists companies in establishing and administering retirement plans. Invesmart provides investment advisory services through Invesmart Advisors, and brokerage services through Invesmart Securities. Invesmart represents more than 7,000 retirement plans.
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