PLANADVISER - November/December 2018 - 24

Pathways to plan, participant and practice success
H
ow one adviser used shrewd
management efficiencies to raise
his profit margin 30%, and how
two others learned to spot, and ignore,
" due diligence " requests for proposals
(RFPs)-thereby saving valuable time
for their firm-were just two nuggets
attendees may have gathered at this
year's PLANADVISER National Conference
(PANC), held at the J.W. Marriott
in Orlando, Florida, in September. For
three days, top minds in the retirement
planning industry discussed topics
such as these and other " Pathways to
Plan, Participant and Practice Success. "
Amply represented among the
speakers
moderators
and
were
PLANADVISER Top 100 advisers and
PLANSPONSOR Retirement Plan
Advisers of the Year, who detailed
how they have applied emerging
trends and best practices in running
and building their successful firms.
Additionally, two 2018 PLANSPONSOR
Plan Sponsors of the Year revealed
what they look for and value in a plan
adviser partner.
DOL Audits of Retirement
Plan Advisers
" The Department of Labor [DOL] has
become very focused on investment
advisers, " said David Kaleda, a principal
with Groom Law Group, Chartered,
speaking on the " DOL Audits of
Retirement Plan Advisers " panel. " The
Employee Benefits Security Administration
[EBSA] manual says [the
department] will target the adviser
and provider communities, " he said.
In particular, the DOL is interested
in compensation disclosures, Kaleda
said, adding that Groom is currently
helping more than 30 clients handle
DOL investigations. In 1996, it was
typical to be working on only five.
What prompts the DOL investigations
are referrals from the Securities
and Exchange Commission (SEC)
about non-level compensation from a
third party, or other indirect payments
that could potentially be construed as
conflicted, as well as private lawsuits
or complaints lodged with the DOL by
a retirement plan fiduciary or participant,
Kaleda said.
Sheridan Road Financial was
subject to a DOL investigation of its
Employee Retirement Income Security
Act (ERISA) practice in 2015, said Jim
O'Shaughnessy, managing partner.
" It put us on the defensive and lasted
two-and-a-half years, only ending
earlier this year, " he said. " It was actually
a very good practice for us to
go through. The DOL [was] trying to
understand our ERISA advisory practice,
what services we provide and
how we are compensated. "
Advisers are
compensated in
numerous ways, he said, sometimes
through ERISA budgets at the recordkeeper,
sometimes as a broker, or a
registered investment adviser (RIA), or
a 3(38)
fiduciary, or through a forfeiture
account. " The main area of the
DOL's concern is to look for settlor,
nonfiduciary actions, which may have
been compensated through the plan,
which is not permitted, " he said.
Changes to plan design cannot be
24 | planadviser.com November-December 2018 Art by Leo Espinosa; Photography by Matt Kalinowski

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PLANADVISER - November/December 2018

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