Benefits January 8, 2004

Investors Turn to Research Reports for Online Advice

January 8, 2004 (PLANSPONSOR.com) - Most investors receiving financial advice online are turning to analysts' research reports and online portfolio tool recommendations.
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Nearly seven out of 10 (68%) wealthy investors polled by Forrester Research who have read analysts’ reports online consider this to be financial advice. This was followed by 64% of the group that see online portfolio tools’ recommendations as advice.

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Overall, Forrester found 64% of wealthy consumers have received financial advice. With a guiding hand, it may not come as a surprise that this group were twice as likely as the unadvised to consider the six activities asked about by the research to be advice. Including analyst’s research reports and online portfolio tool’s recommendations, the other advice components researched were:

  • financial advisers’ recommendations
  • adviser-created financial plan
  • financial news
  • message boards.

In fact, those that were unadvised were 50% more likely not to consider any of the activities to be advice.

Financial news was the third most likely source for online advice for more than half of the sample (59%). Adviser-created financial plans (53%), financial adviser recommendations (52%) and message boards (45%) rounded out the list of advice channels for those investors that have received Internet-based advice.

For those that have not received advice, 31% see an adviser-created plan as financial advice, followed by:

  • 27% – financial advisers’ recommendations
  • 25% – online portfolio tools’ recommendations
  • 24% – analysts’ reports
  • 20% – financial news
  • 13% – message boards.

Perhaps somewhat surprising is that more participants who have received the advice offline (30%) classify an online portfolio tool’s recommendations as advice than a financial adviser’s recommendations (29%). Yet for those that have not received the advice offline, more people (18%) lean toward a financial adviser’s recommendations than an online portfolio tool’s (16%).

Among those that have received advice offline, most (37%) consider an analyst’s research reports to be actual advice, compared to the least likely, message boards, considered advice by only 17% of the group. Also garnering attention as an advice path were an adviser-created financial plan (33%) and financial news (33%).

Deals and People January 7, 2004

PBGC Head Steps Down to Spend More Family Time

January 7, 2004 (PLANSPONSOR.com) - The head of the nation's private pension insurer, who has led the agency through an immensely trying period when it had to absorb enormous liabilities from failed pension plans from airlines, steel companies and others, is stepping down.
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Steven Kandarian announced Wednesday that he plans to leave the Pension Benefit Guaranty Corporation (PBGC) in February, after two years as the agency’s executive director. Kandarian said he is departing to spend more time with wife Stephanie and three young children who have stayed in Boston where the pension executive has commuted on weekends.

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Kandarian was appointed to head the PBGC in December 2001 by Secretary of Labor Elaine Chao, who serves as Chairman of the agency’s Board of Directors. In a statement announcing Kandarian’s departure, Chao labeled the PBGC head “a prudent manager” who Chao said skillfully promoted the Bush Administration’s efforts to strengthen the nation’s pension system.

The official announcement listed as Kandarian’s accomplishments as:

  • becoming an effective public advocate for reform of the pension funding rules to put the defined benefit system and the PBGC on a sound financial footing
  • overseeing an agency reorganization to ensure better accountability and service to participants
  • creating the position of Chief Technology Officer to conduct an agencywide upgrade of the PBGC’s information technology.

Before joining the PBGC, Kandarian had more than 20 years of experience in the private sector as an investment banker and as the founder and managing director of a private equity partnership. He plans to return to the private sector.

Created by ERISA, the PBGC is charged with stepping in to assume pension liabilities from ailing or bankrupt companies. A pension-funding crisis during Kandarian’s tenure produced a stream of failed plans – many in the steel and airline industries – that have had a punishing effect on the PBGC’s budget (See PBGC: Deficit Now Stands at $5.7 Billion ).

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