Administering a plan and managing its assets requires certain actions and involves specific responsibilities. It is important that you understand your fiduciary responsibilities and obligations and how an investment professional could help mitigate your fiduciary liability. Our team of experienced Accredited Investment Fiduciaries® can work with you through an ERISA 3(21) investment advisor or ERISA 3(38) investment manager capacity.
A 3(21) investment advisor
Provides customized investment recommendations to the plan and can provide general financial planning and asset allocation recommendations to participants to help them achieve their retirement goals
Typically selects plan investments and presents them to the plan committee on a regular basis
Does not assume which investments to include as options for participants – you maintain that control
A 3(38) investment manager
Has discretion and control over the plan’s assets and management
Can accept the significant responsibility (and liability) of selecting, monitoring, and replacing investments
Assume legal responsibility and liability for individual investments selected, allowing you to better manage and mitigate your fiduciary risk
Working as a 3(38) investment manager is a unique opportunity that many advisors are unable to pursue. On average, less than 5 percent of advisors in the industry have the ability to serve as a 3(38) investment manager. Our relationship with Cambridge, an industry leader in fee-based advisory solutions who fully embraces the fiduciary standard, enables us to serve clients in this capacity. Plan fiduciaries seeking to reduce their liability for investment decisions by hiring an ERISA 3(38) fiduciary advisor must understand that it requires giving up the control over plan investments and that some, but not all, fiduciary liability can be shifted.
As part of our service, we can provide you with an online fiduciary governance system. This tool allows us to document our focus on prudence and the execution of fiduciary duties, as well as provide benchmarking analysis and investment analytics. It also serves as a lockbox for all pertinent plan documentation (i.e. reviews, adoption agreements, disclosure statements, committee meeting minutes, governmental filings, etc.).
As fiduciaries to your plan, we operate with the highest form of legal liability, place the plan’s interests before our own, provide full disclosure, and avoid conflicts of interest. In essence, we sit on the same side of the table as you, encouraging a consultative rather than sales based relationship.