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
A Small Number of Specialized RIA Firms; a Few Other Entities
Legal Reduction of Risk
Who is Advising Your Plan?
|The Plan Sponsor can delegate significant fiduciary risk to the Investment Manager.||X||X|
|The Investment Manager has fiduciary responsibility||X||X|
|The Investment Manager will manage, monitor and rebalance The retirement portfolios||X||X|
|The Investment Manager is interested in reducing plan Investment costs.||X||Maybe|
|The Investment Manager provides advice with accountability.||X||Maybe|
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.