George Michael Gerstein Sits Down With 401(k) Specialist Magazine to Discuss Fiduciary Implications of ESG Investing

Extract from 401(k) Specialist Magazine: “Does anyone have a concise definition of ESG? Anyone? Neither do we. It’s one of the main sticking points for many 401k advisors and their plan sponsor clients when constructing investment menus with environmental, social and governance (ESG) factors in mind. The DOL and similar regulatory bodies have made attempts at guidance to help clear it all up (most notable in 2008, 2015 and just last month), but true to form with government “help,” it’s too often anything but. Which is why we called George Michael Gerstein, Fiduciary Governance Group Co-Chair with legal powerhouse Stradley Ronon Stevens & Young. Gerstein has followed the issue closely and cleared much of the confusion during a presentation and panel at Fi360’s annual conference in San Diego in April. He took some time to answer the most common questions he’s getting on the topic, and the red flags 401k advisors, sponsors and participants should watch for when entering the space.” A link to the Q&A can be found here.

FX Global Code turns 1 – what does it mean for fiduciaries?

As  I articulated in Profit & Loss, “Though [the FX Global Code] does not have the force of law, it can serve as a useful springboard for fiduciaries to buttress risk controls and fiduciary awareness over an industry that seems obscure to some. The Code can catalyse a change from disengagement and insufficient understanding of common (and, in certain instances, controversial) FX practices to engagement and a deeper understanding of a market whose products are in so many investment policy statements and mandates of retirement plans.” I wrote that the Code’s voluntary nature opened the door to plan investment committees and investment managers the opportunity to gauge the level of the FX service provider’s engagement with the Code and how such engagement (or lack thereof) could implicate their fiduciary duties. I opined: “However, the genius of the Code is that not all principles apply to each market participant, and, as a result, requires at least an active review of the Code to determine which principles apply to a particular market participant, including a fiduciary. An investment committee that outsources currency hedging to a third party may have an interest in how that third party will plan to adhere to the Code. Through awareness comes engagement with service providers. Because the Code’s principles set forth good practice in the market, a plan fiduciary should become aware of the Code and internalise it.” My full op-ed can be found here.

Ignites: GAO Nudges DOL to Clear Up ESG Guidance

George Michael Gerstein Interviewed by Fund Intelligence on GAO’s ESG Report

Noah Zuss of Fund Intelligence interviewed me, along with Jon Hale (Head of ESG Research at Morningstar) and David Blanchett (Head of Retirement Research at Morningstar Investment Management), regarding the practical effects of the GAO report and its relation to the DOL’s own recent ESG guidance in this developing area. The article can be found here.

GAO report on ESG Investing Released

The highly anticipated GAO report on ESG has been released. Analysis to follow.

David Grim: SEC Release “Potentially Transformative”

David Grim (left), at tonight’s ICI General Membership Meeting, says the “proposed reforms represent potentially transformative changes for firms providing investment advice to retail investors” and that “firms have real opportunity to engage with regulators and shape any final policy outcomes.”

Larry Stadulis’ One Word to Describe Effect of SEC Release: Uncertainty

Larry Stadulis, at the ICI General Membership Meeting in Washington, says, “uncertainty is the key takeaway from my perspective.  Proposed rules usually clearly address those practices they seek to eliminate.  That is not the case here.”

George Michael Gerstein Discusses Interplay of SEC Release With DOL Fiduciary Rule and State Developments

George Michael Gerstein (right), joining Larry Stadulis (not pictured) and Dave Grim (left) at the ICI General Membership Meeting, identified the moving regulatory pieces and impetus of major fiduciary law reform.

InvestmentNews: 5th Circuit denies states’ second attempt to defend DOL fiduciary rule

The 5th Circuit again denied efforts by California, New York and Oregon to defend the DOL Fiduciary Rule. The Administration has a few more weeks to decide whether to appeal to the Supreme Court.

David Grim, Larry Stadulis & George Michael Gerstein @ ICI – The SEC, the DOL, and the States: A New Fiduciary World

Join us tomorrow at the ICI General Membership Meeting: 5:15-5:55 pm at Washington Hilton, Gunston Hall