The SEC and the Department of Labor published a list of questions today to assist retirement plan fiduciaries when reviewing investment consultants' potential conflicts of interest, according to postings on both agencies' websites (link here). The government agencies released the tips after an SEC investigation found that business relationships among pension consultants and money managers can result in potential conflicts of interest.
The list suggests asking whether a consultant has provided all disclosures, receives payments from any money managers it recommends and has procedures in place to address any conflicts of interest. Other questions concern fees, whether a consultant is registered with the SEC or a state securities regulator as an investment adviser, and whether the consultant would consider itself a fiduciary of the given retirement plan.
"These questions should help plan trustees navigate among the many choices in pension consultants and make informed choices that are beneficial to plan participants," Susan F. Wyderko, director of the SEC Office of Investor Education and Assistance, said in a statement. The tips "will help plan fiduciaries evaluate the objectivity of advice and recommendations furnished by their pension consultants," Ann L. Combs, assistant secretary of labor for employee benefits security, also said in the statement.