401k Lawsuit Denied by Federal Judge
Study: Individuals Working With a Financial Planner Add 29% to Their Retirement Income
(Source) – Research by David Blanchett and Paul Kaplan of Morningstar, Alpha, Beta, and Now . . . Gamma, has attempted to quantify into real numbers the value that financial planners can provide. Their research shows that financial planners help individuals generate roughly 1.82% excess return each year, creating roughly 29% higher retirement income wealth. This means even if an adviser is charging a 1% fee a year for the management of retirement assets, the financial advice still has a huge impact on generating additional retirement income. Click here for the entire article.
Our take: This research showcases the tremendous value that a financial planner can bring to an individual’s retirement. According to this study, if an individual is on track to earn $50,000 per year in retirement, they may be able to increase this amount to $64,500 per year by working with a financial planner throughout their career. Find out how we can help you with your retirement, by contacting us at [email protected].
IMPORTANT DISCLOSURE: Results may vary. Lighthouse Capital, LLC did not participate in this research study performed by Morningstar, Inc..
New DOL Rule Requires Financial Advisers to Act in Client’s Best Interest
(Source) – The Secretary of Labor reaffirmed that the fiduciary rule will begin to phase in on June 9. The new definitions of who is a fiduciary will go into effect along with the impartial conduct standards on June 9–60 days later than originally planned….This means that on June 9, IRA advisors and others will be expected to provide advice that is in retirement investors’ best interests, charge no more than reasonable compensation, and avoid misleading statements. Click here for the full article.
Our take – Ever since Lighthouse Capital opened in 2012, we have utilized a business model that puts our financial advisers in a position to work in our client’s best interest. To be candid, we find it to be a black eye on our industry that there are many adviser’s currently operating without their client’s best interest in mind. If you are concerned that your financial adviser may not be working in your best interest, contact us at [email protected].
401k Lawsuit Denied by Federal Judge
Summary: Last Thursday, a federal district court judge in Minnesota dismissed a class-action lawsuit brought forth by participants in the Wells Fargo 401k plan. The suit alleged that Wells Fargo breached their fiduciary duty by including their own Wells Fargo target date funds in the plan. Central to the plaintiff’s argument was that Fidelity and Vanguard offered lower cost and better performing funds in comparison to the Wells Fargo funds. However, the court disagreed with the plaintiffs assertion that the mere existence of less expensive and better performing funds, without showing a flawed decision making process, was grounds for a 401k fiduciary breach lawsuit. In the 10 page decision issued by the court, Judge Doty stated, “[plaintiff] pleads no facts suggesting that the choice of affiliated funds was the result of flawed decision-making.” This decision is subject to appeal and could possibly be overturned by the United States Court of Appeals for the 8th Circuit.
Our take: Plan Sponsor’s may insulate themselves from 401k lawsuits by having a sound decision-making process for determining what funds should be included in their 401k. Having an independent investment adviser quarterback this process can be an inexpensive way to provide this value. Learn how we can help manage your 401k by contacting us at [email protected].