Advisers see conflict in Fidelity-Ibbotson; Question independence of third parties providing 401(k) advice.(News)

Investment News, July, 2005

Byline: Sara Hansard WASHINGTON - Not only is the latest alliance between a mutual fund giant and a firm providing independent investment advice likely to affect chances that federal investment-advice legislation is approved, but some advisers say that even the use of such entities to advise participants in 401(k) plans poses a conflict of interest.

When Fidelity Investments of Boston hired Ibbotson Associates Inc. of Chicago "to bless their plans and choose from a limited universe of high-cost funds, it's a gross violation of fiduciary standards for Ibbotson to take on that role,'' said Frank Armstrong, a certified financial planner who is president of Investor Solutions Inc. in Coconut Grove, Fla. "As long as they're being restricted to a...

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