Congress Wants Funds' Rivals To Share The Advice Gravy

A statutory go-ahead for fund companies to sell advice as well as investment products to 401(k)s is "on the table" on Capitol Hill and could be in the pension bill that Congress will try to wrap up this week, a spokesman for House-Senate Conference Committee Chairman Mike Enzi (R-Wyo.) said. But he made clear there is a huge catch. Under the terms of the deal, no advice can be sold unless the plan sponsor involved gets assurance that the advice model is suitable for the plan's investors.

Because the advice issue is so incendiary, decisions about exactly how this proposal will work will be put off until all the other disputes holding up the pension bill are resolved and it is clear the bill has a chance to pass.

Only then ­ supposedly sometime this week ­ will the showdown take place, as independent advice providers and management companies clash over writing the final language. The fund industry has in its corner House Majority Leader John Boehner (R-Ohio), who has invested half a decade in trying to pass an advice bill and cannot expect to have another opportunity as good as this. But independent investment advice providers can block him in the Senate. "We have independent advisors who would be hurt if just Boehner passed," said Teresa Bloom, chief of governmental affairs for the American Society of Pension Professionals and Actuaries. "They would be left out in the cold."