Fiduciary Risk

WHAT DOES FIDUCIARY MEAN?

When an individual is a fiduciary, they take on certain legal responsibilities. In 401(k) terms, a fiduciary is someone who is responsible for making decisions about, or manages, an employer-sponsored retirement plan and its assets. Being a fiduciary means that you have to make decisions that are in the best interests of your employees. And you may be personally liable if the decisions you make are not clearly in their best interests.

SELECTING THE RIGHT 401(K) SERVICE PROVIDER CAN REDUCE YOUR RISKS

If you’re one of the people responsible for managing your company’s 401(k) plan, then you understand that 401(k) decisions need to be fair for your employees—both in terms of the plan’s benefits and the fees that you’re paying.

Knowing all the ins and outs of selecting, monitoring and updating the fund lineup can be time consuming, confusing or perhaps overwhelming. But it doesn’t have to be. One of the best ways to get help and protect yourself is to hire an experienced investment manager who can take on some or all of the responsibility and liability for making critical decisions about the funds available in the plan.

COMPARE FIDUCIARY PARTNER OPTIONS

Fisher Investments is a 3(38) Investment Manager and this quick chart is intended to contrast the primary responsibilities of a Broker/Agent vs. a 3(21) Investment Advisor vs. a 3(38) Investment Manager and is not a comprehensive listing. Responsibilities are with respect to the plan and not with respect to the participants.

3(38) Fiduciary Comparison Chart

Know who offers fiduciary support and who doesn’t

You have a lot of options to consider when choosing 401(k) partners. Here is a break down of the different types of 401(k) advisers you can work with. If your adviser is a 3(21) Investment Adviser or a 3(38) Investment Manager, you’ll see that in writing in your contract as required under ERISA section 408(b)(2).

Fiduciary Responsability

BROKER AGENT

A broker or agent is responsible for recommending “suitable” investments, but may not have any legal duty to act in your best interests. Brokers may have a financial motivation to recommend certain investments over others.

3(21) Investment Adviser

3(21) INVESTMENT ADVISER

A 3(21) Investment Adviser goes a bit further and actually shares some of your legal liability by acting as a co-fiduciary, meaning they’ll recommend investment options and share your risk.

FISHER INVESTMENTS, A  3(38) Investment Managers

FISHER INVESTMENTS, A 3(38) INVESTMENT MANAGER

As ERISA laws permit, you can authorize a designated 3(38) Investment Manager to assume your primary responsibility and liability for selecting, monitoring, and updating the investment options available to you and your employees. Your duty as the decision maker for your 401(k) plan is to select the right Investment Manager for your business.


How to Limit Your Risk as a 401(k) Plan Manager

We will reduce your legal liability and regulatory risk. Fisher Investments serves as an “Investment Manager” under Section 3(38) of ERISA, which allows you to delegate your responsibility of designating a menu of investments for participants. You monitor us and the reasonableness of our fees, and we select, monitor and update the plan’s investments. With Fisher as your partner, you can be confident that you have the support needed to manage your plan in your employees’ best interest, and help them achieve the retirement they deserve.

Fisher 401(k) is a small business fiduciary