More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
Committee chairman Senator Herb Kohl (D-Wisconsin) mentioned possibly drafting legislation to make it easier for employers to offer lifetime income options to workers. However, compelling Americans to purchase some sort of annuity plan, as was rumored, is not something Kohl or the committee supports, the senator said.
Kohl stressed that while annuities may be the right fit for some retirees, they can also be highly complex and, in the retail market, they have often been associated with aggressive sales tactics. In 2007, the Aging Committee began examining some of the questionable practices used by so-called senior financial investment specialists in order to gain access to the retirement savings of older Americans. Many seniors targeted by unscrupulous salesmen have lost their life savings because they were steered toward investment instruments that were unsuitable for them, given their retirement needs and life expectancy.
"Our goal is to find ways to ensure U.S. retirees have access to lifetime income options that provide adequate consumer protections at a reasonable cost," Kohl said. "So far, the focus of most of our education efforts have been on encouraging people to save, but we have done little to help the average retiree make the difficult choices about how to make their savings last," said Kohl. "With Americans living longer, the stakes are high for not adequately managing one's savings."
At the hearing, Phyllis Borzi, assistant secretary of Labor for the Employee Benefits Security Administration, presented early analysis of responses they have received to their joint Request for Information (RFI) to determine how the agencies might enhance Americans' retirement security.