Roger Levy wants to know what all the fuss is about. The head of Scottsdale, Ariz.-based Cambridge Fiduciary Services was invited to file an amicus brief in Tibble v. Edison International with the approval of both sides.
“Quite frankly, we predicted this outcome; that the court would find there is a separate duty to monitor consistent with the prudent expert standard,” he calmly notes. “I, for one, don’t see what all the excitement and clamor is about. First, the ‘duty to monitor’ has been recognized by prudent advisors for some time. Second, people are up-in-arms because they believe the court didn’t define what a “duty to monitor” is. Again, that is not right. Looking backwards, it has always been about the underlying investments and what can be improved in a plan.”
Levy argues that it is “simply naïve” to believe that even the best run plans are run well. It isn’t that the tort lawyers are causing these problems.
“The problems were there all along, and now they are simply exposed,” he adds. You have all this lavish spending on entertainment and travel. It should always be about reducing plan costs and making the participants’ live better, but if you say that you’re looked at as is you’re stark-raving mad and a turncoat.
He concludes by noting the real lesson from Tibble.
“Everything you do in relation to retirement has a fiduciary responsibility. Plan participants will now be looking into fees, revenue sharing and all of that; they will be looking into the monitoring services that are provided.”
See our full interview with Roger Levy in the August 2015 issue of 401(k) Specialist magazine.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
