Ken Fisher’s 401(k) Unit Says DOL Fiduciary Plan Limits Investment Advice

Ken Fisher’s 401(k) subsidiary said in a letter to the Department of Labor that its proposed rule to amend the definition of fiduciary on retirement advice could limit investment advice to small plan participants as well as restrict non-fiduciary marketing services.

DOL resumed its second day of hearings on Tuesday at its headquarters in Washington, with panelists testifying on Labor’s regulatory impact analysis — the costs and benefits — of its plan to redefine fiduciary under the Employee Retirement Income Security Act.

Nathan Fisher, managing director of Fisher Investments’ 401(k) Solutions Business, which provides 401(k) services to small and mid-size companies, told DOL in a comment letter that fee-neutral asset allocation models that identify specific investment alternatives should remain within the scope of investment education—not fiduciary advice.

While Fisher Investments says it understands DOL’s concern that service providers “can use asset allocation models to steer participants to use a specific investment alternative,” Fisher said, the department should “continue to include within the scope of ‘investment education’ online tools and asset allocation models that identify specific investment alternatives in cases where such alternatives are fee neutral with respect to the service provider offering the tool.”

Fisher also urged the DOL to “make clear” that marketing activities by an investment manager of its own services is outside the scope of the proposed rule.

As drafted, DOL’s plan would extend fiduciary status to persons who provide certain investment “recommendations” for a fee or other compensation, whether direct or indirect, to, among others, plan fiduciaries, Fisher told DOL.