Worcester Business Journal

wbjournal.com | May 15, 2017 | Worcester Business Journal 25 What it takes to lead a college The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. F or more than year, the futures of Individual Retirement Account investors and their financial advisors has hung in the balance of multiple develop- ments – from the publication of a new regulation last April to the presidential election in November, to an execu- tive order signed by President Donald Trump. At issue are changes to the Employee Retirement Income Security Act (ERISA) determined in April 2016. They were scheduled to take effect this month, although Trump's executive order has postponed their implementation and required the U.S Department of Labor to revisit the rules. While the delay is encouraging, rescinding this fiduciary rule is not yet a done deal. The Obama Administration drafted the changes in fiduciary practices with the intention of protecting retirement savings from questionable investment advice, saying any investment advice must occur in the best interest of the client. Advisors would argue the require- ments – making sure financial advisers act in their clients' best interest, be transparent about fees and commissions, and avoid con- flicts of interest – are widely practiced. The entire industry is being held accountable for unprincipled actions of a few. Under the new rule, any rollover advice would trigger a fiduciary relationship. Advisors who are commission-based need a best-interest contract with clients in order to earn a commission from any IRA rollovers. Additional costs assumed by advisors will likely be passed along to the consumer and ultimately make a roll- over more expensive and possibly out of reach for some Americans. One of those added costs would stem from the increase in legal liability advisors would now face under the new rule, resulting in the need for more malpractice insurance. Any shortage of advisors or costly increases will have a far-reaching impact on many Americans. It is estimated that 85 percent of new traditional IRA accounts stem from roll- overs, and the overwhelming majority of those account holders are older Americans. At the end of 2015, there were approximately 40.2 million households with at least one IRA. The clear winner here is the DOL since the agency expanded its governance over IRAs. The investment prod- uct makers would be on the winning side. Their current fee structure may initially be impacted, but the upfront sales load fees will just end up as an increase in expense ratios. The clear losers are the households with IRAs and advi- sors as they face an increase in liability and less revenue due to the additional costs and for some the loss of revenue from working with individuals with a less substantial port- folio. The risk-reward scenario for advisors is simply not in their favor to advise clients with fewer assets. Professor Christine Beaudin chairs the finance department at Nichols College in Dudley. Robert B. Kuppenheimer is an alumnus of Nichols College and serves on its board of trustees. Avoid the f iduciary rule And there are several new college presidents in the Central Mass region taking on that task. Quinsigamond Community College and Mount Wachusett Community College announced new presidents this spring, and now Becker College has appointed Nancy Crimmin as interim president as it looks to find a permanent replacement for Robert Johnson (see page 10). The pressure on all college presidents to forge a path to sustainable success is significant, and even more so for those leading private institutions. By nearly all measures, Robert Johnson's tenure at Becker was a successful one. On his watch enroll- ment increased by more than 20 percent, the endowment grew from $1 million to more than $4 million, and the school doubled down on its strong national reputation for its digital gaming program. In a period of consolidation for many others schools, Becker's growth stands out. But for most of our region's colleges and univer- sities who rely on a heavy percentage of students from Massachusetts and surrounding New England states, it has been a difficult road as the number of high school graduates feeding the sys- tem is down, and pressures on the affordability of higher education have become more intense. Not only do college presidents need to act as rainmakers-in-chief, they need to think strategi- cally about their school's unique advantages: Programs they can invest in and build their brand around, or new niche areas they can exploit, deliv- er value and grow enrollment. That entrepreneurial spirit is alive at several schools, especially the Massachusetts College of Pharmacy and Health Sciences, where strategic expansion has continued in its core programs as well as with the purchase of the New England School of Acupuncture. Higher education remains a big industry in Central Massachusetts, with 17 colleges/universi- ties with campuses in the region – six of them public institutions and 11 private. These schools are a great asset, both to our economy and cultural life. Yet leading an institute of higher learning is only getting harder, and the skill set more complex as the tenure of a college president seems to have gotten shorter over the years. We hope that our region's new college presidents and their peers bring the entrepreneurial drive and vision that it takes to keep their institutions com- petitive and thriving. V I E W P O I N T E D I T O R I A L BY CHRISTINE BEAUDIN AND ROBERT B. KUPPENHEIMER Special to the Worcester Business Journal Christine Beaudin W WO R D F R O M T H E W E B Comments of the issue "This is a disaster that further exacerbates income inequality. Tax cuts never trickle down and stimulate the economy." - Anonymous commenter, May 2, responding on President Donald Trump's tax plan WBJ Tweets of the week "Worth noting that James Healy mentioned in the article was multiracial - his mother was born a slave, had a common law marriage w/his father" - Catholic Democrats (@CatholicDems), May 2, on a story about the College of the Holy Cross' history amid its debate over changing its mascot name "Jack Healy was an incredible person and he will be sorely missed in the manufacturing community in the Commonwealth." - Veda Ferlazzo Clark (@vfclark1), May 1, on the death of Jack Healy, manufacturing advocate and longtime CEO of the Massachusetts Manufacturing Extension Partnership W Facebook feedback "UMass Memorial Health Care is lying. DPH has already determined that they cannot close nor eliminate beds." - Steve Quist, May 5, after UMMHC said it could meet the area's health needs after closing 13 psychiatric beds Robert B. Kuppenheimer W e're in the heart of graduation season – oversized ceremonies, hon- orary degrees to prestigious guests, faculty and students in their formal robes and funny hats. It's all part of the pomp and circum- stance of higher education. However, behind the rich formality and traditions is the pressure on college presidents and their senior staff to make it all work as a business.

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