Spitzerism reaches Pension Advisors

Many pension consultants fail to disclose conflicts of interest to their clients and accept undisclosed compensation from money managers and brokerages. It comes in the wake of long-held suspicions that the 1,700-member pension consulting industry operates a "pay-to-play" system in which the advice it dispenses to pension funds is tainted by its own financial interests.
The commission conducted focused examinations of 24 pension consulting firms. Among its findings: Many consultants fail to disclose to pension clients that they also receive compensation from the money managers, brokerages and affiliates that they recommend. Although the SEC did not announce specific enforcement proceedings against pension consultants, it is likely that such action will become public in coming months, a person familiar with the situation said.

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