Keep your politics off LinkedIn because it will hurt your brand

I had a great interview with Bruce Johnston on this site about social media and I think one of the important lessons he taught was how LinkedIn wasn’t Facebook. It’s a networking tool and what you might post on Facebook isn’t necessarily something should be posting on LinkedIn.

I’m amazed how so many people on LinkedIn post political posts and think that’s OK. While I have my political views, I don’t think that has any bearing on my business and the clients I want to work with. I’m just surprised with how many Trump supporters and detractors think their President trump related posts is going to help them get business if their business doesn’t have any relation to politics.

I’ll never forget a financial advisor who said he only wanted to work with clients who were Conservatives and I imagine there are financial advisors who only want Progressive clients and I ask: why? Why should I let potential client’s politics get in the way of my potential business? It just doesn’t make sense to me.

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Advisors Advantage, March 2017

My latest newsletter geared towards retirement plan providers can be found here.

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How You Can Stand Out From The Crowd As A Retirement Plan Advisor

My least article for can be found here.

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Litigation defending their 401(k) plan is the cost of doing business offering proprietary mutual funds

It’s a favorite topic of mine because it’s fascinating to consider, so many mutual fund companies are being targeted for litigation for offering proprietary mutual funds in their employees’ 401(k) plan.

Every week, it seems that another mutual fund company is being sued. T. Rowe Price seems to be the latest defendant. T. Rowe Price offered 80-95 proprietary funds in their own 401(k) plan and prior to 2012 (coincidentally the time frame of the Tibble v. Edison case?) were offering retail share classes.

Before you attack T. Rowe Price, what are they supposed to offer in their plan? Low cost Vanguard index funds? Come on now, how would it look if they didn’t offer T. Rowe Price funds for their employees? Again, it’s like the restaurant staff offering takeout, how is it going to look to people interested in owing T. Rowe Price mutual funds?

I see these litigation costs of doing business, simply put. Mutual fund companies need to have proprietary funds in their plan, just to keep up appearances and avoid the barbs from advisors and other mutual fund companies that they won’t offer proprietary funds to their employees.

Of course, mutual fund companies could limit the liability by making proprietary funds a small chunk of their fund lineup, but they likely wont because it’s all about keeping up appearances and they will see these lawsuits as their cost of doing business.

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Revenue Sharing is Legal, so what?

An excessive fee lawsuit against Oracle Corporation will go on as the plaintiffs overcame a motion to dismiss.

The lawsuit alleges that Oracle allowed the plan record keeper Fidelity to be paid between $68 to $140 per participant rather than a reasonable per head fee of $25 for a plan the size of Oracle’s. Oracle moved to dismiss because revenue-sharing is “perfectly legal” and because “nothing in ERISA requires fiduciaries to solicit bids [for record keeping services]” through a competitive process.

I love the revenue sharing is legal argument, I’ve been hearing it for the last 12 years when I mentioned to people that I have a problem with it. I always likened revenue sharing to kick backs and payola and I’ve always said that it’s only legal because no one has passed a law because it’s illegal. As far as using the whole it’s legal argument, there were a lot of bad things in our history that was actually law until society said that stuff was unlawful. So revenue sharing is legal because no one has tried to make it illegal. I will always contend it doesn’t pass the smell test with me because only certain mutual funds pay it and that means companies like Oracle may likely use funds just based on revenue sharing and there is cases that show that using revenue sharing as a big criteria in selecting investment options is a possible breach of fiduciary duty.

Now that Oracle has lost their motion to dismiss, expect a settlement announced shortly.

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Referrals are about helping, not making you $$$$

The retirement plan industry is very close knit. Everyone knows who does great work and the few that don’t. Word travels fast about the good, the bad, and the ugly in this business.

Whether you are a financial advisor, third party administrator (TPA), an ERISA attorney, or another plan provider; chances are you will have to work with other providers. You will meet other plan providers one way or another and one thing you have to realize is that these other plan providers are there to network with and they can be great help in growing your practice.


Too often, I would meet other plan providers and their question is whether I can get them clients. I’m sorry, I’m in the business of getting clients and most of the time, other financial advisors refer these clients and you can’t stay in business very long as an ERISA attorney if you are costing business for the folks that referred you. In addition, I get very few plan sponsors clients directly that have no financial advisor and I’m really not in the business of steering business to particular advisors. If a plan sponsor who needs a financial advisor contacts me, I would present a handful of names of advisors in their area to contact and let the decision rest in the hands of the plan sponsor. Most of the time it works and there was one time it didn’t, when my law firm selected an advisor I didn’t recommend. 9 years later, I’m still pissed off.

When it comes to helping plan sponsors get a TPA, again, I always like to give recommendations on a handful of firms to consider because it’s ultimately a plan sponsor decision and I never want to be suspected of greasing the selection in favor of one provider.

Yet, that happens a lot in this business. Plan providers pushing plan sponsors to specific other providers just because that provider change is helping the advisor who made the recommendation.

I once asked why financial advisors steer so many plans to the payroll providers and the answer was that because the payroll provider TPA was very generous in referring new clients to those financial advisors who steered business to them. Heck, there are plans that are a good fit for a payroll provider TPA, but should they be picked as the TPA just because the advisor gets to wet his beak (Don Fanucci rules) by referrals by the payroll provider.

Transparency is an important part of this business so that I stay clear of making a provider choice for the plan sponsor. I never want to be accused of steering a plan sponsor to one provider because I do plan documents for them or because I got some business from that TPA or advisor.

Plan providers should seek out relationships with other providers and the help they can provide you isn’t particular new clients, but it can be with information to get a better chance at getting that new client or keeping that current one. There is more to life than just getting clients, it’s more important that your clients gets the best possible providers for their plan and not because it benefits you in the short term.

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The Rosenbaum Law Firm Review

My latest newsletter can be found here.

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Why an Employer Should Sponsor A 401(k) Plan

My latest article on can be found here.

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Sometimes Plan Sponsors just want to throw you off their “scent”

When you meet retirement plan sponsors just at different networking events and they find out that you’re a retirement plan provider, they may volunteer that their retirement plan is in perfect shape. As we know as retirement plan providers, they often don’t know if that really is true. However, they volunteer that information because they don’t want to talk about their retirement plan and don’t want to be solicited.

I’m not saying that you should harass them, but I certainly don’t think you should take their word for it. I had an advisor call me up where he approached a company and was told that they had a $1 billion 401(k) plan and everything was fine. Of course, the advisor checked and the plan was about $930 million short of $1 billion. It was also on an expensive bundled platform and had 95 investment options on them.

What’s the advisor likely to do? Take that information and approach the plan sponsor in a delicate manner and how they’re probably paying too much in plan expenses.

The point is that you can have multiple bites at the apple and that just because a plan sponsor is trying to dismiss you, doesn’t mean you shouldn’t check up to see f they’re telling the truth about your plan.

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Read the plan document

Being an ERISA attorney for a couple of third party administration (TPA) firms when I first started helps you develop a sense of humor because there are too many people I was associated with who had absolutely zero training when it came to plan administration.

One of my favorite jokes that I created which is something I stole from Chris Rock was “if you want to hide something from an administrator, hide it in the plan document file.” The joke was because I knew very few TPA administrators that bothered to read the plan document. They would just review what the plan specs were on the system. The problem is that often the specs were posted on the systems that were inconsistent with what the plan document said. That relates to another joke, stolen from Rodney Dangerfield in Back to School: “what if the person who put the plan document specs on the systems was a maniac?”

While I worked for a TPA where it wasn’t a maniac who put the specs on the system, but by someone who had some authority and once started in the file room. It was a great rags to riches story except for the fact that she should have stayed in the file room and would blame anyone else but for ineptness. I can never forget the new client who wanted 1 loan outstanding in their plan document because participants were taking out 8 loans each. So I drafted what they wanted, but Ms. File room put on no loan limit on the system. When the advisor found out the error, Ms. File room blamed me even though the document had the one loan cap.

When it comes to plan specs, the plan document is the last word except if mistakes were made from the previous restatement. That happens for many reasons, but at least you start from there then something on the recordkeeping system that carries no weight. Of course, many use the summary plan description as a resource. It’s a great resource except when it’s inconsistent with the plan document.

In the end, the plan document is an important resource and it always needs to be made sure that the plan is operating according to its terms.

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