John Hancock Investments Launches New White Paper for Retirement Plan Advisors

BOSTON, April 14, 2014 /PRNewswire/ -- John Hancock Investments has posted on its website a new white paper aimed at financial advisors who advise retirement plans, anticipating pending regulations regarding the fiduciary standard of care. Entitled "A seismic shift: what regulatory reform means for your retirement plan business model," the paper explores how advisors can reposition their value propositions and market their services to retirement plans for the next decade.

The paper's authors, Robert J. Rafter, J.D., of RJR Consulting, and Gene Huxhold, CFP, AIF, of John Hancock Investments, note that, as a result of potential regulatory changes, it is anticipated that all brokers and advisors rendering investment advice may be held to a fiduciary standard of care, regardless of the focus areas of each advisor's practice. In this environment, they write, the ability of retirement plan advisors to differentiate their services could disappear.

The paper is also of interest to non-specialist advisors whose practices extend beyond retirement plans. These advisors could find that aspects of their retirement plan services will constitute rendering investment advice under the expanded definition that regulators are expected to adopt. This expansion could subject many non-specialists to unwanted liabilities or responsibilities as fiduciaries. 

"Advisors will become, in essence, accidental fiduciaries," said Rafter, whose independent consulting firm specializes in advising large financial institutions on the Employee Retirement Income Security Act. Rafter frequently speaks on and writes about retirement plans, fiduciary standards, risk management, and investment advice. He also teaches a fiduciary standard of care course at The Retirement Advisor University at the UCLA Anderson School of Management Executive Program.

"We believe that if an advisor to a retirement plan will be considered a fiduciary, he or she should have made that a conscious choice," said Huxhold, who manages John Hancock Investments' distribution to Corporate Retirement Plans. "The question for the non-specialist is, 'Am I prepared to take on the additional responsibilities and risks in a highly specialized area? I need to look at this relative to my primary advisory business.'"

The authors suggest that before the regulations take effect, advisors should take advantage of a unique opportunity to reposition their value propositions and market their services to plan sponsor clients and prospects, influential attorneys and accountants, and other advisors and brokers who do not wish to operate as fiduciaries.

The paper examines three common fiduciary roles: Limited-Scope 3(21) Fiduciary, 3(38) Discretionary Investment Manager, and 3(16) Plan Administrator. Attention to process is key, the authors maintain, adding that the outcomes of recent court cases make it clear that plan sponsors and their fiduciary advisors must develop a much tighter fiduciary process, which includes monitoring the reasonableness of fees and revenue-sharing arrangements. The paper includes a section about recent court cases and also provides an appendix for documenting a tight fiduciary process.

About John Hancock Investments
John Hancock Investments provides asset management services to individuals and institutions through a unique manager-of-managers approach. We combine unbiased asset management with vigorous investment oversight to offer investors a deeper level of diversification and strong risk-adjusted returns across asset classes. A wealth management business of John Hancock Financial, we managed more than $111 billion in assets as of December 31, 2013, across mutual funds, college savings plans, and retirement plans.

About John Hancock Financial and Manulife Financial
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada, and the United States. Operating as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States, the company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents, and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$599 billion (US$563 billion) as of December 31, 2013. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

The John Hancock unit, through its insurance companies, is one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments,  401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.

John Hancock Funds, LLC Member FINRA I SIPC

SOURCE John Hancock Investments

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