Is your Broker a fiduciary? Why you should care?
Ever since ERISA came into law, there has been a small contingent of advisors who have chosen to put their clients interests above their own by working under a "Fiduciary" standard of care. This has been in contrast to advisors working under a "Suitability" standard of care as required by many broker-dealers. You may be wondering what the difference is?
In the cleverly nuanced world of 401(k) plans, it is common practice for some brokers, mutual fund companies and insurance companies to offer co fiduciary programs, fiduciary warranties or similar sounding services. While this can sometimes provide meaningful benefits to a plan fiduciary they may just be good marketing for the offering company. It is critical for the plan trustee(s) to understand what is being represented, what it costs and if it provides meaningful protection for plan fiduciaries.
Ask for written acknowledgement as confirmation of "ERISA section 3(21)or 3(38) fiduciaries." Your current advisor may not be able to act in this capacity. An ERISA fiduciary cannot accept revenue-sharing payments.
AIF designees have acquired a thorough knowledge of fiduciary responsibility and can be an invaluable resource to Qualified Plan fiduciaries . The AIF designation represents that person’s knowledge of a Global Fiduciary Standard of Excellence and their application of the global standard into their own practice.
AIF and AIFA designees have the training necessary to help ensure that your Plan investment process is managed with the appropriate fiduciary standard of care.
Does Fiduciary indemnification really exist?
ERISA voids any indemnification provision that relieves a fiduciary of responsibility: A fiduciary cannot be indemnified from plan assets.