Fiduciary Consulting

Retirement Plan & Investment Fiduciary Services
Individuals in positions of trust and confidence regarding the investment decisions of others’ money are by definition “investment fiduciaries.” This includes individuals involved in decisions about investments in corporate Pension, Profit Sharing, and 401(k) plans – along with trusts, and foundations. The definition also applies to those offering general investment management services in a professional capacity.

As fiduciaries, there are specific processes required in order to meet the responsibilities and obligations of serving in such a capacity.

Am I a Fiduciary?
Retirement plan fiduciaries assist with the decision-making process regarding:

• Investment options or managers offered to retirement plan participants. Included in this group are:

• Plan trustees
• Investment committee members
• Brokers and/or investment advisors
• Insurance agents offering retirement plan products

• The selection of brokers or advisors who make investment decisions for plans.

The Board Members of a Foundation, along with those serving as Trustees act similarly when it comes to investment decisions. For any fiduciary, abdication of duties is an option only if one is willing to accept personal liability for coming up short. Specific adherence to legal requirements is essential, as is leaving a verifiable audit trail substantiating that prudent thinking and processes dictated the decisions that were made. Hence, it is essential that fiduciaries fully understand their responsibilities and implement accepted prudent practices during their decision making processes. This is especially pertinent today given recent legislative and regulatory fine-tuning governing fiduciary responsibility. Improved Services with the Same or Lower Fees? It is Possible!

Are you paying for services you should be receiving? While adding a fiduciary-friendly approach to your decision-process may suggest additional costs, that may not be the case. In fact, proper fiduciary oversight often results in overall cost-savings because of associated fee reviews. Even if no savings are found, quite often the existing fee-structure is sufficient to cover the additional fiduciary services. Don’t pay for services you’re not getting. We’ll show you how!

Pros and Cons
Fees aside, fiduciary oversight merely assures that investment decisions are being managed according to professional investment industry standards. Hence, making an effort to have ‘everything in order’ merely improves the overall professionalism of the related organization and all persons involved. Ideally, it makes corporate retirement plans more attractive as a benefit, and prevents all fiduciaries from making debilitating investment errors of ignorance, omission, and negligence.

Lastly, due to the growing trend of litigation being used to resolve fiduciary lapses (with liability often personal), it is more imperative than ever to implement Prudent Fiduciary Practices in your investment decision making process.
Fiduciary Self Assessments

If you are a fiduciary, you may contact us for a complimentary 22-Point SAFE™ (Self Assessment for Fiduciary Excellence) which you can use to gauge where you or your organization presently stands. Or, for a more basic level assessment, take our seven questions complimentary online assessment.

Fiduciary Assessment
Take our complimentary assessment to see how well you’re meeting your investment fiduciary obligations. Simply answer “Yes” or “No.”

1. Do you know the standards and laws governing your fiduciary requirements?
2. Are your plan’s investments sufficiently diverse to meet the risk / return profiles of your participants?
3. Do you have an Investment Policy Statement (IPS) governing the decisions you make, and is it regularly reviewed and updated to reflect necessary changes?
4. Do you use “prudent experts” and document the due diligence used in their selection?
5. Are you controlling and accounting for all investment expenses among all involved parties?
6. Are you regularly monitoring the activities of selected “prudent experts” according to your IPS, and substantiating the process with reporting and other documentation?
7. Are you confident all fiduciaries / co-fiduciaries are avoiding conflicts of interest and prohibited transactions?
   

If you’ve answered “No” to any questions, contact us – we can help you elevate your fiduciary standards to a new level.

On the other hand, if you answer yes to all questions, don’t forget that this is just a preliminary set of questions. Contact us for a complimentary 22 questions Self Assessment for Fiduciary Excellence (SAFE™) which will help you determine if you are doing all you can and should to be a top-notch fiduciary.

© 2008 Ernharth Group