Fiduciary Protection

As a plan fiduciary there are a number of important steps you can take to minimize your fiduciary liability. Included in those steps are: 1) Implement and maintain a written Investment Policy Statement, 2) Implement and maintain an effective 404(c) Policy, 3) Purchase Fiduciary Liability Insurance and, 4) Work with an ERISA 3(38) Fiduciary.

Few retirement plans have an ERISA 3(38) Fiduciary as the Investment Manager for the plan. ERISA 3(38) Fiduciaries (such as Gasber Financial Advisors, Inc.) have a duty of loyalty to the plan and its participants. They must act in your best interests. Don't be confused by "fiduciary guarantees" or "fiduciary warranties" offered by some companies; some may actually deny fiduciary responsibility. To reduce your legal liability, work with an ERISA 3(38) Fiduciary who will accept this appointment in writing. Your retirement plan deserves the loyalty and expertise of an ERISA 3(38) Fiduciary.

  • No Fiduciary Status
    Stock Brokers, Insurance Agents, Most Banks, Brokerage & Insurance Firms
    No Reduction of Risk

  • Limited Scope Fiduciary
    Some RIA Firms, A Few Brokerage Firms & Banks
    No Meaningful Reduction of Risk

  • Fiduciary/Investment Manager
    A Small Number of Specialized RIA Firms; a Few Other Entities
    Legal Reduction of Risk

Who is Advising Your Plan?

ERISA 3(21)
Limited Scope
ERISA 3(38)
Investment Mgr
The Plan Sponsor can delegate significant fiduciary risk to the Investment Manager. X X YES
The Investment Manager has fiduciary responsibility X X YES
The Investment Manager will manage, monitor and rebalance The retirement portfolios X X YES
The Investment Manager is interested in reducing plan Investment costs. X Maybe YES
The Investment Manager provides advice with accountability. X Maybe YES

An ERISA 3(38) Investment Fiduciary “takes on much of the decision making” and “virtually all of the fiduciary responsibility” in the plan, according to well-known ERISA attorney Fred Reish.