The Pension Protection Act and a proposal by Certified Financial Planner Board of Standards may end up hurting investors more than helping them. So suggests columnist Thomas Kostigen of MarketWatch, who said the new act that will allow mutual funds companies to give advice to 401(k) participants is “akin to letting the fox into the henhouse,” as most plan members put their money in mutual funds. In other words, says Kostigen, the mutual funds may end up recommending that the 401(k)ers invest the funds these companies offer. He calls the law “a bonanza for mutual funds.” Kostigen says the pension bill is “an ugly example of just how disingenuous the financial services industry, and Congress for that matter, can be.” To make matters worse the CFP proposal would allow advisers to opt out of acting as fiduciaries to their clients, which, he says, would allow the board’s members to “put their own interests ahead of what is ultimately best for the client, and put commissions ahead of investors’ goals and objectives.”
