Office of Regulations and Interpretations

Employee Benefits Security Administration

Attn: Conflict of Interest Rule, Room N-5655

U.S. Department of Labor

200 Constitution Avenue NW.

Washington, DC 20210

RE: Proposed DOL Definition of the Term “Fiduciary”; Conflict of Interest Rule – Retirement Investment 

Advice

To Whom It May Concern:

Francis Investment Counsel LLC welcomes the broadening of the definition of ERISA fiduciary and proposed 

conflict of interest rule. We have witnessed first-hand the significant harm done to the retirement prospects 

of too many American workers as a direct result of conflicted investment advice. The past forty years have 

clearly demonstrated the willingness of certain members of the financial services industry to spend millions 

on advertising its role as trusted advisor, make repeated verbal assurances to that affect, only to then sell 

retirement plan participants overpriced products to maximize profits. As justification for their actions, they 

hide behind indecipherable multi-page conflict of interest disclaimers that allow it to claim the customer 

made an informed decision. The time has come to put some teeth back into the rules that govern the 

conduct of the financial services industry and better protections in place for the retirement savings of 

American workers. 

DESCRIPTION OF THE COMMENTER

Francis Investment Counsel LLC ("FIC") is a Wisconsin-based and employee-owned registered investment 

advisor that was created in 2004 for the sole purpose of providing ERSIA fiduciary investment advisory 

services to both employers and their qualified plan participants. We assist plan sponsors in the selection and 

monitoring of investment, trust, and recordkeeping service providers as well as provide generalized group 

financial workshops and individualized one-on-one investment advisory services to plan participants. FIC 

currently provides these services to approximately 60 mid- to large-sized qualified retirement plans that total 

over 30,000 participants and more than $6B in plan assets.

FIC has grown steadily over the past eleven years. Our fixed-fee service model and continued growth refutes

the “straw man” argument that organizations accepting full fiduciary responsibility, and receiving no ancillary 

revenue, cannot thrive in today's retirement plan investment advising marketplace.

1. Regarding the new definition of "fiduciary"

With respect to the carve out provisions for investment advice provided to a plan fiduciary that requires a 

representation from the plan that it has 100 or more participants, we respectfully suggest that this condition 

be eliminated. While there are certainly going to be instances in which the plan fiduciary to whom the 

proposal is being made will have sufficient expertise to evaluate it, we think it is often the case that this 

expertise is lacking. The "at least 100 or more participants" condition seems to us to be far less likely to have 

a beneficial impact for plan participants than the "at least $100 million in plan assets" alternative test. While 
successful businesses have great expertise in their own field, it is a given that the employee retirement 

benefit plans play second fiddle to that main attraction. This can result in less than optimal attention by 

business owners and managers to the details of the rather complex factors at work in the retirement plan 

arena. The end result can be arrangements that are less beneficial for plan participants than if the proposals 

were being reviewed by persons with the requisite retirement plan financial expertise who were also 

obligated to act in the best interests of participants.

2. EXPAND INVESTMENT ADVICE TO INCLUDE RECOMMENDATIONS TO DISTRIBUTE PLAN/IRA ASSETS.

We wholeheartedly endorse the Department's position to include within the definition of "investment 

advice" any “recommendations concerning the investment of securities to be rolled over or otherwise 

distributed from a plan or IRA.” In our experience, the number of solicitations posing as objective investment 

advice has accelerated over the past ten years as the dollars involved continue to expand. 

While there is clearly a need for general education about plan distribution alternatives, whenever a financial 

services representative offers an individualized recommendation the participant should be protected against 

a sales pitch masquerading as advice. The stakes are just too high for American workers and temptations too 

great for the financial services industry to allow the current oversight and enforcement regime to continue. 

Many participants believe that because their employer makes call center representatives readily available, 

that these individuals must have their best interest at heart. Unfortunately, when it comes to answering 

questions regarding plan distributions, this is too often not the case. Some of our clients' plans allow for inservice distributions upon the attainment of a certain age or after a combination of service and age. In our 

experience, this plan design feature often leads to an increased level of prospecting by local financial services 

representatives seeking those eligible for such distributions and encouraging the transfer of plan assets to 

products not available on the plan's investment menu. After a lifetime of accumulating assets for retirement, 

it is difficult to imagine a situation in which a participant does not have a greater need for unbiased fiduciary 

advice.

3. THE BIC REGULATION SHOULD BE EXPANDED TO COVER ADVICE TO SMALLER PLAN SPONSORS ON THE 

COMPOSITION OF AN INVESTMENT OPTIONS MENU.

We believe that expanding the regulation in this way to cover such advice to smaller (fewer than 100 

participants) participant directed plans would be a significant advantage to such sponsors and therefore to 

plan participants by leading to better designed plans.

First, participant directed defined contribution plans are the norm. The number of such plans which do not 

offer investment direction by participants is miniscule.

Secondly, the initial investment menu selection is critical to the plan's ability to offer participants the chance 

for a secure financial future. Often, the initial menu will stay in place for a long time. Thus, the plan sponsor's 

need for unbiased best interest advice is substantial, both at the time of initial selection and on an ongoing 

basis as changes occur. Expanding the regulation to cover advice to smaller plans in this regard would most 

likely redound to the benefit of the plan participants and recognizes that smaller plan sponsors are less likely 

to have the expertise in the retirement plan financial arena that larger plans are more likely to possess.