FPA to Launch Independent Organization for Broker/Dealers: The Financial Planning Association Board of Directors and the FPA’s Broker/Dealer Advisory Council have agreed to launch an independent organization to serve the needs of broker/dealer and registered investment advisor firms that serve independent contractor representatives.

“After more than a year of conversations and analysis, the FPA Board realized the association’s broker/dealer program cannot adequately serve the specific and complex needs of independent contractor broker/dealers,” FPA president David Yeske said. He noted that the group still welcomes firms that want to be institutional members and their reps who want to be individual members.

While details of the creation of this new organization and a transition plan are not final, the group hopes to launch the new entity in 2004.

“Independent contractor broker/dealer members of the FPA are unified in this joint decision,” said Tony Batman, chair of the FPA’s Broker/Dealer Advisory Council and chief executive of 1st Global. “We salute the FPA Board’s courage in recognizing our unique and specific need for, and support of our efforts to create, this new organization. Broker/dealers that support the financial planning process will still be very committed to and involved in their support of the FPA.”

One in three 401(k) participants would use advisors to make investment choices: Nearly one-third (32 percent) of 401(k) participants would use a financial advisor to make 401(k) investment choices on their behalf if the option were available, according to a survey by Big Research for Nationwide Financial.

Among the 2,808 401(k) participants surveyed, the same number, 32 percent, would not use the service, while 36 percent didn’t know whether they would use the service or not, Nationwide reported.

According to the survey, one-quarter of respondents are confident that they are making the best 401(k) decisions without help, while the same number are most confident making decisions with access to general information about investments. Another 28 percent are most confident making 401(k) investment choices with access to financial advice, while 23 percent are most confident having an advisor make investment decisions and do investing for their 401(k) accounts.

Nationwide found that women were more likely than men to report that they would use a professional money management service (32 percent versus 30 percent), or to report that they would be most confident having an advisor make investment decisions and do investing for their 401(k) accounts (27 percent versus 19 percent).

Report says Smaller company employees outsave larger peers: Contrary to headlines about Fortune 500 companies cutting retirement benefits, the opposite trend is playing out in the small and midsized business sector, according to a report by The Principal Financial Group.

Overall 401(k) plan participation among employees of small and midsized business jumped 2 percent over last year, according to The Principal Annual 401(k) Report.

The individual deferral rate rose slightly from 6.3 percent to 6.5 percent of salary, with employees earning between $30,000 and $50,000 per year achieving the highest deferral rate. The report is based on data from 27,000 401(k) plan sponsor clients and 1.9 million plan participants.

“These businesses are, at a minimum, holding steady, and many are actually improving their retirement plan benefits. Further, smaller-company employees are saving at higher rates than their large-company employee peers,” said Larry Zimpleman, executive vice president of retirement and investor services at The Principal.

The study showed a strong correlation between plan sponsor matching contributions and high deferral percentages. The employer discretionary match rose slightly to an average of $0.36 per dollar of employee contributions, from $0.35. While plan participation and deferral were up overall, the trend didn’t hold for younger employees - 42 percent of eligible employees under the age of 35 don’t participate, the report said.

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