In September of 2009, the Department of Labor kept in tack the rule that only allows independent registered investment advisor's with a fiduciary responsibility to provide investment advice to plan participants. The reason for this rule is to separate product salesman (brokers, mutual fund and insurance companies) from providing advice because conflicts of interest may exist and they may steer plan sponsors and participants towards affiliated funds.
Registered investment advisor's (RIA) are regulated under the Investment Advisor's act of 1940 which requires RIA's to always act the client's best interest (fiduciary duty) and to disclose all conflicts of interest. RIA's are also paid directly by the client and do not receive commissions.
Plan sponsors and participants may believe they are getting one on one service but words mean things and brokers/insurance companies call the service they provide as "guidance" or "education." They know they can't give specific instructions to buy or sell a particular investment or provide asset allocation recommendations because they will run afoul of ERISA and internal compliance rules.
Many people including human resource managers and employees are realizing they are not receiving the advice they need to make their retirement plans successful. According to Hewitt & Associates, in 2007 twenty-nine percent of employers offer one-on-one financial counseling, up from 22% in 2005. I would venture to guess that this number has increased after last years financial meltdown and subsequent losses in clients retirement plans.
