More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous 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.