Brooke’s Note: Just because you’re paranoid doesn’t mean…you know the rest. I think there’s an ironical phrasing that can be used, too, for the people who are more shocked, shocked by the “shock” value of PBS Frontline than by anything that it revealed. How about: Just because a journalist achieves shock value doesn’t mean that the subject matter isn’t pretty darn shocking. Yes, those of us who really know the business know it could have been much, much better — and there was at least one overreach. The documentary was being done by a person, Martin Smith, who is — by his own frank admission — keeping a small production company going past retirement age because he doesn’t have enough to retire on. In other words, one behind-the-eight-ball baby boomer artsy type takes on the mutual fund and 401(k) business. You can see the glass as half empty on that; I see it half full. Smith had the courage to show that aspect of ourselves that we hide more than our sexual quirks — money issues. Sure, he could have balanced the PBS piece by ...

Brooke’s Note: As long as the 401(k) industry is dominated by brokers looking to make a buck and employers happy to go along with that sales culture in the name of expediency then plan participants remain an afterthought. Fancy new rules form the Department of Labor are worth the paper they’re written on. For now, there is still a strong, and perhaps strengthening tide of inertia that is winning the day, according to Scott Pritchard who spends enough time among employers to get a pretty good read on the situation.

First proposed in 2007 by the Department of Labor, Regulation 408(b)(2) was hailed as a game-changer for the 401(k) industry. For the first time, plan sponsors and participants would know exactly what their 401(k) plan was costing them, because 408(b)(2) would finally force service providers to disclose all of the compensation they receive from a plan. See: Why the DOL’s massive new 401(k) disclosure requirements are a 'very, very big deal’.

The thought was that plan sponsors and participants who had for years been blind to the hidden costs ...

Brooke’s Note: If you’re going to have a most-influential list in a realm as dynamic as the RIA business, you really want a crowning example that somehow brings together the myriad ways that RIAs are succeeding and combines them in one tidy package. Last week we gave you our picks, six through 10, of our top 10. See: 10 most influential RIA figures going into 2013 and how they’re reshaping the industry, Part 1. We’ve found our No. 1 pick. You’ll see that his fairly mind-blowing success greedily uses an all-of-the-above strategy that includes big use of a roll-up, a TAMP, DFA, Silicon Valley’s wealth, the untapped potential of the accounting profession, social media and even the mass affluent. Oh, and the CEO is about age of some red-shirted college athletes. Further up on the list at No. 5 we have a happy-go-lucky advisor who counts turtle-riding among his feats. How does he rate so high? Remember the song with the refrain: “You’ve got to fight for your right to paaaaarrrrty.” It’s true. I believe that anybody who makes success look super-easy ...

Charles Schwab’s Retirement Plan Services is taking its second bite at the 401(k) apple — one based on index funds. The firm reported yesterday that it has racked up $4 billion in assets and is overseeing 50 401(k) plans a year into the roll-out of the Schwab Index Advantage plans.

The San Francisco-based firm started from scratch just a year ago on SIA. Besides low-cost mutual funds, participants also receive advice from advisors. See: How Schwab is gearing up its RIAs to fight for 401(k) assets.

Along with that advice, the company is tallying cost savings for its participants, too — and spelling out the exact costs in dollar amounts that are helpful to layman investors. See: Schwab’s CEO engages in a Q&A about how his company’s deep-discount, more-advice 401(k) plan will work.

Workers enrolled in the firm’s Index Advantage have seen the operating expense ratio for investments in their 401(k) plans fall 77% to $14.78 per $10,000 invested because the plans use index mutual funds, according to Schwab. Previously, these participants were paying $65.11 per $10,000 invested ...

Brooke’s Note: Nobody has really successfully navigated the 401(k) code landmine in the RIA business. What you need is not somebody who sees the mines but the spaces between them. Maybe that person is Scott Hanson. In this article, you’ll see a number of the top 401(k) thinkers in the business tossing out reasons why his new venture may fail. And you’ll see Scott swat those concerns aside. Scott and his partner, Pat McClain are not your average cats with their aw-shucks manners, fearless demeanors and robust senses of humor. They also like other humans. I wrote a big article about them back in 2007 and in my due diligence I contacted a radio station manager in Sacramento where the two men were broadcasting a weekly investments show. The manager knew that Scott was in the midst of three big ventures, had a big family and was still doing the radio show and saw him at the airport looking a little rough. Scott said he was just returning from China where he had been on a mission for church for three weeks. He’s the ...

Brooke’s Note: For two days I couldn’t articulate to myself why I liked this column so much. We (mostly Lisa Shidler) have written dozens of articles about DOL changes that are ushering in an era of opportunity for RIAs to take over. Quite simply the fiduciary standards are being tightened and enforced in a way that is not as friendly to brokers. But we also always get countervailing comments from real experts who say that RIAs are even less qualified because they don’t really know the 401(k) business. I have always accepted the gray area created by these two views as something that was beyond my grasp as a non-401(k) expert. After reading this column I not only feel I get it much better. I also am convinced that RIAs can close this mysterious gap that supposedly only brokers or 401(k)-only RIAs can fill. Sheldon Geller explains it to us like we have brains.

Many investment professionals appear to market fiduciary services, yet their service agreements routinely disclaim exposure to fiduciary liability and affirm non-fiduciary status.

Many service providers give supposed fiduciary guarantees ...

Brooke’s Note: Just because Merrill Lynch is paranoid, does it mean that what scared them out of the public pensions business is also out to get you — the RIA? That was the question I found myself asking as I read this article. It’s a very difficult question to answer but one that I suspect that enough RIAs will find a 'no’ answer to that they will land some very wonderful accounts suited better to their management than Merrill Lynch’s.

Bank of America Merrill Lynch is largely shutting down its public-pension business as of March 31, giving an opening to RIAs who may be looking to expand their business in this sector.

The wirehouse decided in April 2011 to stop adding public-fund clients, according to Matt Card, a Bank of America Corp. spokesman.

“The decision was made following an 18-month feasibility study. Through the study, it was determined that the company would begin taking a more focused approach to segments in the public-funds space, based on increasing regulatory, reputational and litigation risk,” Card wrote in an e-mail.

Brooke’s Note: Mercer knows retirement plans. We knew that. We were less certain the pensions giant knew how to produce the executive memo version of its knowledge. We still don’t. But we do know that Amy Reynolds of Mercer can take a library of knowledge and late-breaking developments and distill it into an RIABiz column. Thank you, Amy.

With defined-contribution plans continuing to assume greater importance in employees’ achieving retirement security, 2013 is shaping up as a year when many sponsors will take a fresh look at their plans’ objectives, investment options and communications with participants.

These days, it’s no longer a situation where DC plan sponsors can simply “set it and forget it.” The trend is for plan sponsors to regularly evaluate whether their DC plans are successful for both the organization and its employees. As a result, plan sponsors are more active in reviewing plan objectives, more prescriptive when it comes to investment options, and more invested in communicating with employees who want to understand how to achieve their own retirement income goals.” See: 9 things advisors to 401(k) plans must do to keep ...

Brooke’s Note: Joe Duran talks about how an oligopoly of a few big, branded national players will one day dominate the advisory business. Maybe we’re getting a little taste of what the United Capital CEO is talking about as CAPTRUST hits $85 billion (though its dated ADV states $68 billion) with this deal — and seems to only be gaining strength with size. Of course, the added twist is that the deal makes CAPTRUST more of a classic RIA in the sense that it’ll now be in a better position to do discretionary business with what its acquiree, Freedom One, brings to the table.

CAPTRUST Advisors LLC, one of the nation’s biggest 401(k) RIAs, has wrapped up a deal that has sent shock waves through the 401(k) industry. See: Cerulli: RIAs and hybrid RIAs make giant advances on banks and wirehouses in the 401(k) race.

The purchase of Freedom One Financial Group gives $85 billion Raleigh, N.C.-based CAPTRUST the added scale and fiduciary capabilities to make a bid for domination of the 401(k) business. The market powerhouse was recognized by RIABiz ...

Brooke’s note: Welcome to the second installment of our countdown of the Top 10 people who have had the biggest impact in the 401(k) business in 2012. As in the earlier part of the list, there are a few controversial picks, and these individuals all have their critics. But these are people pushing for new products and new legislative rules in the 401(k) arena to ultimately help participants. Typically our picks in these lists tend toward the meteoric mezzanine-level entrepreneurial companies. But some big companies and big-time bureaucrats are acting their size and making some big, impressive moves to reflect the cut-the-crap times.

5. J. Fielding Miller, chief executive of CAPTRUST Advisors LLC

CAPTRUST is often mentioned in 401(k) reports from Cerulli Associates Inc. as one of the premier RIAs specializing in the 401(k) industry. See: Cerulli report: Specialized RIAs likely to win middle-market 401(k) plan battle.

Although the Raleigh, N.C.-based firm has its own broker-dealer, about 99% of CAPTRUST’s business is fee-based. Over the course of the last five years, Miller has catapulted this firm from a boutique RIA to ...