Human Capital with Melanie Waddell

For today's conversation, we're taking a different approach in order to highlight ThinkAdvisor's new industry recognition program: The LUMINARIES, which is recognizing top advisors, broker-dealers, RIAs, asset managers and other firms, as well as their outstanding programs, products and services. The 2021 finalists of this groundbreaking program will be announced soon online at ThinkAdvisor.com. They'll also be featured in print in Investment Advisor magazine's September and November issues. The Luminaries awards shine a spotlight on excellence in four key areas by telling the stories of those leading the industry forward in: Diversity & Inclusion, Thought Leadership, Executive Leadership and Dealmaking/Growth. Today, we're speaking with one of the esteemed judges of the LUMINARIES program: Mark Tibergien. We'll be speaking with more of the VIP judges, as well as some of the LUMINARIES' winners, in a new podcast series that kicks off soon as part of this new recognition program. Mark Tibergien -- who started his professional life  in journalism, radio and sales -- went on to lead BNY Mellon Pershing's Advisor Services business. The now retired industry veteran continues to support and participate in exciting programs like the LUMINARIES.

In this episode of Human Capital we talk with David Bellaire, general counsel for the Financial Services Institute in Washington, about FSI’s lawsuit against the Labor Department for withdrawing its independent contractor rule. FSI filed a lawsuit on May 13 against the Labor Department for withdrawing its final independent contractor rule and is now actively lobbying Senators about a legislative remedy. “I think that there is a deeply held view in the Biden administration that all workers are benefited by being employees rather than independent contractors -- that the protections provided to them are greater and therefore all workers should be employees of their firms," Bellaire said. "Our members would see that very differently. … They chose this model because they want to own their own business, they want to serve clients in the best way they could without interference.” Listen in as Bellaire talks about the lawsuit’s timing, how withdrawal of the rule is impacting firms as well as why FSI worries that Labor and the Biden administration may pursue a more stringent independent contractor standard.

In this episode of Human Capital, Ed Slott of Ed Slott & Co. relays important tax advice related to potential changes to the stepped-up basis and estate tax, and also warns that the potential boosting of the required minimum distribution age to 75 is likely “useless,” and that lawmakers may actually be “creating a bigger problem” with such a change. Slott also zeros in on how rollover advice is a central aspect of both the Labor Department’s new fiduciary prohibited transaction exemption as well as the SEC’s Regulation Best Interest, and warns that advisors need to up their game on their rollovers smarts. “For advisors, all they need to know, and it’s a lot to know, they have to do a better job putting clients’ interests first," Slott said. "...There’s a lot of money in these 401(k)s, employer plans, and there’s big rollover opportunities for advisors….but in all of these they want advisors to use a best interest, a fiduciary-type approach.”  

In this episode of Human Capital we talk with Susan Schroeder, former chief of the Financial Industry Regulatory Authority’s enforcement division, who’s now a partner at WilmerHale and vice chair of its Securities & Financial Services Department. Schroeder sees enforcement actions related to Regulation Best Interest compliance “coming soon” — likely this year. Listen is as Schroeder also weighs in on what Gary Gensler’s likely arrival as SEC chairman means for Reg BI. Schroeder also talks about the likelihood of enforcement actions related to Form CRS and more.

In this episode of Human Capital, we catch up with Skip Schweiss, the 2021 president of the Financial Planning Association. Schweiss, former president of TD Ameritrade Trust Company and managing director of advisor advocacy for TD Ameritrade Institutional, talks about FPA’s priorities, including boosting FPA’s membership.  “…FPA will continue to deliver content that can not only keep a planner’s skills sharp and evolving with the times and with trends but also to provide them that continuing education credit. We just know and acknowledge we aren’t the only game in town anymore and that cannot be the reason to belong to FPA.” “…We’ve got to evolve our value proposition beyond just providing CE and community.” Schweiss also weighs in on the Reddit GameStop incident, the future of the SEC’s Regulation Best Interest

In this episode of Human Capital, we talk with IRA and tax specialist Ed Slott of Ed Slott & Co. about his upcoming book, “The New Retirement Savings Time Bomb,” to be released in March. What’s it about? “The big message is to control the taxes,” Slott says. “We’ve had lots of tax law changes, but every time something happens it seems to effect retirement accounts more than anything else and that’s where most people have most of their savings for retirement – an IRA or 401(k). “The reason those accounts are most affected is the way they were set up.” Listen in as Slott also explains why he still sees 401(k) plans and IRAs as likely sitting ducks for future tax increases under the Biden administration.

In this episode of Human Capital, we talk with Karen Barr, president and CEO of the Investment Adviser Association in Washington, about the growing ranks of RIAs as well as important rule updates that are due to be released by the Securities and Exchange Commission. Barr weighs in on the much-anticipated changes to the SEC’s custody rule. “We understand that there’s now a dedicated team in the Division of Investment Management that’s actively working to update” the custody rule. “We recommended a complete review and rethink of the rule.” Listen in as Barr also talks about why the SEC’s changes to the advertising rule are “getting close to the finish line.”

In this episode of Human Capital, we talk with Charles Millard, the former director of the Pension Benefit Guaranty Corp., who’s now a senior advisor to asset management firm Amundi Pioneer. He discusses why House Ways and Means Committee Chairman Richard Neal, D-Mass., and Kevin Brady, R-Texas, introduced their big bipartisan Securing a Strong Retirement Act of 2020 just a week before the election. “There’s a continuing resolution funding the government that only goes through Dec. 11, so there will be some kind of lame duck session.” Millard addresses the bill’s chances of passage during the lame-duck session and notes one an area of the bill that he viewed as slightly disappointing. “It did not do anything about auto-IRAs… (insert @ 3:11) there’s 50 million working Americans who have no workplace retirement plan or solution. This bill does encourages small businesses to put 401(k)s in place.” Millard also provides an update on the Butch-Lewis Act and its treatment of multi-employer plans as well as the “inherently struggling” PBGC.

In this episode of Human Capital, we talk with popular blogger and financial planner Michael Kitces about XY Planning Network’s recent decision to not pursue a Supreme Court challenge to the appeals court ruling that upheld the Securities and Exchange Commission’s Regulation Best Interest. Says Kitces, who’s also co-founder of XYPN, “The judges said outright in the ruling that RIAs would be put at a competitive disadvantage compared to the status quo as a result of Regulation Best Interest.” Now, says Kitces, XY Planning Network will shift its focus to pushing for state fiduciary rules in the coming year. “When at the end of the day the only alternative is a federal regulator that outright says we’re willing to harm the RIA community to serve the interests of the broker-dealer community, we don’t see that there’s really much other choice in how to advance the fiduciary ball down the field.” Kitces also talks about the chances that a Biden administration would overturn Reg BI — or rewrite it — as well as “the fundamentally broken approach” the SEC took with Form CRS. Kitces also lays out why he’s “extremely nervous” about the Charles Schwab-TD Ameritrade deal.

In this episode of Human Capital, we talk with Ron Rhoades, director of the Personal Financial Planning Program and assistant professor of finance in the Gordon Ford College of Business at Western Kentucky University, who was recently awarded the Tamar Frankel Fiduciary prize by the Institute for the Fiduciary Standard. Rhoades unpacks some big questions that he says have yet to be answered concerning the Securities and Exchange Commission’s Regulation Best Interest: “Is it going to improve the standard of conduct for brokers?...There’s a lot that we don’t know about Reg BI.” With Reg BI, says Rhoades: “Basically the SEC is taking this phrase ‘best interest,’ which has an established legal meaning, and is redefining the English language. The question is: how are they going to redefine it?” As to the SEC’s Form CRS: “It’s a travesty.” Rhoades also prognosticates whether the SEC will get rid of 12b-1 fees.

In this episode, we check in with IRA and tax specialist Ed Slott of Ed Slott & Co., on what the recent debt and deficit numbers reported by the Congressional Budget Office mean for retirement plan participants. The CBO numbers, according to Slott, show that the three-legged retirement planning stool is shaky, and for clients with a 401(k) plan or IRA, “these plans have not yet been taxed so they’re sitting ducks for future higher taxes, and that’s exactly what’s going to happen” because of the deficit and debt numbers. Slott maintains: “There’s no way taxes are going to decrease, that’s for sure” regardless of who wins the White House. “At some point the debt has to be paid down; it’s out of control, it’s consuming our entire national output, so that puts most peoples’ retirement savings at risk of the uncertainty of what future higher taxes will do.” Slott also talks about the importance of Roth IRA conversions now, provides stretch IRA reminders, and talks about the dangers of excessive trading. 

In this episode of Human Capital, we talk with Nick Morgan, a partner at the global defense firm Paul Hastings in Los Angeles, about the Securities and Exchange Commission’s recent changes to the accredited investor definition. Morgan, former Senior Trial Counsel in the SEC’s Enforcement Division, explains the “fundamental” change under the updated definition that includes qualifications and certifications. Morgan explains why the changes are coming now, and opines that while the private markets “are not the Wild West,” the changes can present potential risks.

In this episode of Human Capital, we talk with John Anderson, managing director and head of practice management solutions for Independent Advisor Solutions at SEI Investments, about the potential changes coming to the Securities and Exchange Commission’s Form CRS, the customer relationship summary, which was adopted under the agency’s advice-standards package. Listen in as Anderson also weighs in on why he sees the SEC’s Regulation Best Interest as “evolutionary,” and “a small step in what will be many steps to drive the industry towards a true fiduciary rule.” Anderson also provides feedback on the SEC’s recently updated FAQ on dually registered advisors’ use of the terms “advisor” and “adviser,” and previews SEI’s next white paper on cybersecurity. 

In this episode of Human Capital, we talk with Brad Campbell, former assistant secretary of the Labor Department’s Employee Benefits Security Administration, who’s now a partner at FaegreDrinker in Washington. Campbell weighs in on Labor’s controversial fiduciary prohibited transaction exemption to align with the Securities and Exchange Commission’s Regulation Best Interest, and clarifies a couple “unusual items” that were included in Labor’s plan. Comment letters continued to flood in just before the Aug. 6 comment period on Labor’s controversial plan ended Thursday, Aug. 6. Campbell also talks about an "emerging issue" in litigation involving retirement plans: getting access to participant data, and the data privacy implications. He also clears up some confusion surrounding Labor’s ESG proposal.

In this episode of Human Capital, we talk with Iain Duke-Richardet, compliance strategy principal at Hearsay Systems. Duke-Richardet, an original member of the Financial Industry Regulatory Authority’s Social Media Task Force, joined Hearsay Systems in late June from Accenture. He has also served in senior compliance roles at RBC Capital Markets, Lehman Brothers, Barclays Capital and Goldman Sachs. Says Duke-Richardet: “As a former compliance officer at a large global bank, I have seen firsthand that regulatory compliance is one of the most challenging aspects of digital transformation for financial services organizations.” Pushed forward by COVID-19 and Regulation Best Interest, “firms must rapidly adapt to new digital client engagement models, yet time and resources especially in compliance groups are stretched thin.” Listen in as Duke-Richardet talks about the important role compliance plays at Hearsay Systems, which helps financial services firms engage on a number of social media messaging platforms, and also gives a heads-up on some upcoming FINRA guidance.

In this episode of Human Capital, we talk with Drew Bowden, general counsel for Jackson National Life Insurance Co., who recently became board chair for the Insured Retirement Institute. Bowden, who also served as director of the Securities and Exchange Commission’s exam division, talks about the current regulatory environment in the retirement and annuity spaces, as well as how the pandemic is affecting consumers’ retirement savings. Listen in as Bowden also talks about Regulation Best Interest, the Labor Department’s new prohibited transaction exemption to align with Reg BI, as well as his concerns about the patchwork of state fiduciary rules. Bowden also weighs in on the importance of e-signatures and e-delivery.

In episode No. 18 of ThinkAdvisor's Human Capital podcast, we talk with the former assistant secretary of the Labor Department’s EBSA during the Obama administration. Listen in as Borzi also talks about the current political turmoil surrounding SEC Chairman Jay Clayton, as well as the trouble spots the SEC faces in enforcing Reg BI, which takes effect on June 30. A vocal critic of Reg BI, Borzi says implementation of the rule will be critical as it “leaves a lot of ambiguity.”

In episode No. 17 of Human Capital, we talk with cybersecurity expert John Reed Stark, president of John Reed Consulting, who founded the SEC’s Office of Internet Enforcement.  Stark talks about why the cybersecurity challenges are exacerbated by the COVID-19 work-from-home environment, with ransomware attacks, phishing and business email schemes also on the rise. He also warns, “There are legions of soldiers waking up every morning with the sole desire to attack U.S. systems and exfiltrate important data.”

In episode No. 16 of Human Capital, we talk with Neil Simon, VP of government relations for the Investment Adviser Association, about IAA’s efforts to restore, and expand, the deductibility of fees on professional investment and financial planning advice that was repealed with the sweeping tax overhaul enacted in 2017. Simon also weighs in on the pending lawsuit against the SEC’s Regulation Best Interest as well as when the SEC’s open democratic seat may likely be filled.  

In episode No. 15 of Human Capital, we talk with James Lundy, a former attorney at the Securities and Exchange Commission who’s now a partner at Faegre Drinker. Listen is as Lundy explains why he believes it’s likely the SEC’s exam division will conduct a sweep of advisors’ use of Paycheck Protection Program loans. Lundy also provides a status check on firms’ compliance with the SEC’s Regulation Best Interest and Form CR.

In this episode of Human Capital, we talk with Andy Friedman, founder and principal of The Washington Update. Listen in as Friedman talks about the timing of the next stimulus bill, which is being dubbed CARES 2, and details which tax provisions could likely make it into the package. Friedman also talks about what’s “heating up” in U.S.-China relations and where he sees President Trump’s battle with governors in reopening the economy ultimately ending up.

In episode No. 13 of Human Capital, we talk with Christopher Gerold, president of NASAA and chief of the New Jersey Bureau of Securities, about the relief put in place by state securities regulators because of the coronavirus pandemic.

In episode No. 12 of ThinkAdvisor’s Human Capital podcast, we talk with popular ERISA attorney Fred Reish of Faegre Drinker Biddle & Reath about the legal requirements and best practices that plan fiduciaries and advisors should be adhering to during the market volatility. Reish also details provisions on enhanced participant loans, special Coronavirus distributions and RMDs under the recently passed stimulus bill, Coronavirus Aid, Relief and Economic Security (CARES) Act.

In this episode of Human Capital, we talk with Amy Lynch, president and founder of FrontLine Compliance, on the regulatory relief put in place by the SEC as well as FINRA the coronavirus outbreak upends the markets.

In this episode of Human Capital, we talk with Allison Wielobob, general counsel at the American Retirement Association, who’s also a former Labor Department attorney and legislation counsel for the Joint Committee on Taxation. Listen in as Wielobob talks about why the idea of a Financial Transaction Tax is rearing its head again, as well as what ARA would like to see included in House Ways and Means Committee Chairman Richard Neal’s upcoming “Secure Act 2.0” legislative package.  

In episode #9 of our Human Capital podcast, George Michael Gerstein tell us the latest on where the states’ fiduciary rules stand.

In episode #7 of our Human Capital podcast, Slott jumps into the stretch IRA changes, and why the law sets up an “emergency estate planning revision.”

Di Florio, a former director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations details how regulators’ increasing use of regtech is transforming their supervisory relationships and exam experience with broker-dealers and advisors. Listen in as di Florio also talks about how regulators are deploying technology and data analytics to identify needles in the regulatory haystack and also how the transition from the London Interbank Offered Rate, or Libor, poses a significant compliance risk.  

In this episode of ThinkAdvisor’s Human Capital podcast, Brian Hamburger, CEO of MarketCounsel, digs into SEC's exam letter and other enforcement issues.

In this episode of ThinkAdvisor’s Human Capital podcast, we caught up with Barbara Roper, director of investor protection for the Consumer Federation of America, as she was preparing for CFA’s annual financial services conference, being held in Washington on Dec. 5th and 6th. Roper, who’s also a member of the Securities and Exchange Commission’s Investor Advisory Committee, is no shrinking violet when it comes to criticizing SEC rulemakings and their potentially harmful effects on investors. Listen in as Roper details her concerns about the SEC’s planned expansion of the accredited investor definition, Regulation Best Interest’s potential to leave investors worse off than they were before, as well as what questions she’ll ask the SEC’s two democratic commissioners. This is Human Capital’s last episode for 2019. Thanks for joining us! See you next year.

In this episode of ThinkAdvisor’s Human Capital podcast, we talk with Todd Cipperman, founding principal of Cipperman Compliance Services, a go-to expert on all things compliance-related for advisors, broker-dealers and mutual funds. Cipperman details how a new rule proposal by the SEC to modernize its sorely outdated advertising rule will dramatically alter advisor marketing practices, as well as the SEC’s “aggressive” enforcement direction and the agency’s recent “out of the blue” sweep of registered funds.  

Episode #3 of ThinkAdvisor’s Human Capital podcast catches up with Norm Champ, partner in the Investment Funds Group at Kirkland & Ellis. Champ discusses the pending economic crisis, as well as issues warnings on sky high personal debt levels, the financial literacy crisis, student debt and how policy makers can help fix these issues.

Episode #2 of Human Capital’s podcast catches up with Ric Edelman, founder of Edelman Financial Engines. Edelman discusses how he’s redoubling his efforts to make sure lawmakers shore up Social Security, as well as what steps the Securities and Exchange Commission must take to tame the Wild West cryptocurrency environment.

The Human Capital podcast brings you the latest on the people who are helping to shape the financial services regulatory landscape, be they lawmakers, attorneys, industry officials or lobbyists. We'll get inside views from the movers and shakers on how various policy matters are impacting the advisory industry. Hosted by Melanie Waddell, Washington Bureau Chief for Investment Adviosor Magazine and ThinkAdvisor.com, this bi-weekly podcast complements the weekly Human Capital briefing.