News, Vision & Voice for the Advisory Community


New DOL rule effectively kills off open-architecture option favored by some big plan participants -- and sets off the 401(k) industry

The wrinkle aimed at self-directed accounts is seen as an unnecessary eleventh hour blindsiding by Fidelity, TD and the CFDD among a broad constituency

Author Lisa Shidler June 20, 2012 at 5:44 AM
no description available
Phil Chiricotti: It's a needless requirement that just can't be met.

401(k) Stories


RIA Compliance

Elmer Rich III

Elmer Rich III

June 20, 2012 — 4:47 PM

A couple of opinions:

- 401k plans have been excluded from the core disclosure rules of ERISA for long enough. Maybe that was necessary for them to get established, but no longer. If it’s any sort of material benefit — it has to be disclosed. Period.

- Likely, because there has been so much hype, and hype is a reliable contra-indicator of reality/importance, the whole fee matter is likely going to end up the Y2K non-event of our industry.

Stephen Winks

Stephen Winks

June 20, 2012 — 7:37 PM

Borzi is not saying brokers are accountable and responsible for self directed accounts, just that the consumers who direct their accounts should know how well or poorly they are doing.

This is pro-advisor as it encourages professional management provided by the advisor, not possible for the broker because the industry maintains that brokers do not render advice. This accentuates the accountability and responsibility of the advisor, which is undeniably fiduciary standing.

The push back is that (a) brokers are not accountable or responsible and by requiring reporting on self directed accounts, the technological capability to make brokers accountable and responsible will be put into place and (b) the self directed consumer will discover how adept brokers are at constructing and managing portfolios.

How is this not in the consumers best interest and the responsibility of the broker in retirement accounts?


Darwin Abrahamson

Darwin Abrahamson

June 20, 2012 — 7:48 PM

I agree with Elmer and Steve that SDBAs are not good for participants or for the fiduciaries. The future for successful 401(k) plans is 3(38) investment managers that design and manage models for participants.

Brooke Southall

Brooke Southall

June 20, 2012 — 8:28 PM

I hear you Steve, Darwin and Elmer.

But I also know that as a 401k participant in two former jobs I much preferred the SBDA to the short little menu of funds offered by my employers.

So I’m not quite sure what to make of this.

Of course any plan would likely be better than the lack of one they offer here at RIABiz.


Darwin Abrahamson

Darwin Abrahamson

June 20, 2012 — 8:36 PM

Brooke I understand what you are saying about you former plan. Sorry to say that is the problem with the majority of plans not just a short list but an expense list.


Frederick Van Den Abbeel

Frederick Van Den Abbeel

June 23, 2012 — 4:35 PM

Definitely it appears can murky up the 401k waters with the promotion of self-directed 401(k) brokerage. Perhaps the Schwab, TD, Fidelity (and other direct retail custody providers) TV commercials may have given consumers the impression their technology advice offering means hiring an investment advisor isn’t needed in this day and age.

After all, a consumer just has the follow the “green line” towards achieving their own success.

Mark Nolan

Mark Nolan

February 6, 2013 — 8:53 PM

By having self-directed 401k or Solo 401k feature you can be your own trustee. Some Solo 401k providers or administrators will provide the applicable tax reporting support (e.g, filing of form 5500-EZ). http://www.mysolo401k.blogspot.com/2012/05/what-is-solo-401k-commonly-called.html

Related Moves

August 5, 2020 at 9:33 PM

Another A-list RIA Schwabbie lands on his feet -- this time at DeVoe & Co. -- after TD Ameritrade merger displacement of 2,000-plus

Tony Parkin takes the reins as president of the San Francisco M&A shop and reunites with ex-Schwab boss who left 14 years ago

May 10, 2024 at 1:29 AM

A canary in the coal mine, Amy Richardson left Charles Schwab & Co. for an RIA -- before the 2,000 layoffs -- now a robust job market is saving the Schwab diaspora, she says

The former Schwab director wants former colleagues to know life exists after Schwab and good job opportunities are plentiful in the financial services sector.

December 20, 2023 at 1:52 AM

Schwab 2,000-layoff aftershocks roil the industry as it's revealed top tech talent -- led by widely regarded veteran Kartik Srinivasan -- were axed, raising questions about future of Schwab innovation

Behind every layoff a human story as pink slip to an 'unbelievable talent' epitomizes company's determination to cut $500 million in expenses.

November 3, 2023 at 3:49 AM

See more related moves

Mentioned in this article:

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo

White Paper Postings

Common Tags

Recent Articles

Popular Writers

RIABiz logo


About Us




RIABiz, Mill Valley, California
Copyright © 2009-2024 RIABiz Inc. All rights reserved.