Press Release
DALBAR Expands 401k Advisor Certification
BOSTON, MA, November 20, 2003 -- DALBAR will expand the certification of advisors who advise participants in participant directed retirement plans that is based on its SEC No Action Letter. The certification has been offered through selected 401k providers and effective January 1, 2004, will be available to all providers and sponsors to exercise their fiduciary duty in selecting and periodically reviewing advice providers. The certification relieves providers and sponsors from the cost and burden of performing their own due diligence.
The certification consists of three levels of due diligence that measures the suitability of advisors. The first level is a background check to clear the advisor of any sanctions or other previous incidents and checking the appropriate licensing. Advisors that clear the background check must also pass a test of service quality through a survey of clients. The third level is a test of specific retirement plan knowledge. Advisors are re-certified every year.
The DALBAR Certification is designed to ensure that plan providers and plan sponsors take prudent steps in recommending the use of specific advisors to participants. The need for this due diligence was underscored by Senator Enzi and Representative Boehner in introducing Advice Bills in the congress. Senator Michael Enzi (R-WY) said "Employers also have the fiduciary obligation of prudently selecting and periodically reviewing advice providers". Rep. John Boehner (R-OH) pointed out that "The bill includes important fiduciary safeguards and new disclosure protections to ensure that workers receive quality advice that is solely in their best interests."
The DALBAR Certification process requires approximately ninety days and certified advisors receive a certificate and the right to advertise their certifications, subject to guidelines required by the SEC.
DALBAR, Inc., the nation's leading financial-services market research firm, is committed to raising the standards of excellence in the financial-services industry. With offices in both the US and Canada, DALBAR develops standards for, and provides research, ratings, and rankings of intangible factors to the mutual fund, broker/dealer, discount brokerage, life insurance, and banking industries. They include investor behavior, customer satisfaction, service quality, communications, Internet services, and financial-professional ratings.
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