Advisor Connect

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When it comes to the topic of fiduciary responsibilities for qualified retirement plans, there are three things we know really well:

1. Plan Sponsors are, by definition, a fiduciary of their own plan as they exercise control and act on behalf of the plan.
2. Some number of plan sponsors don’t know this even though we try to do our best to make this clear.
3. There are real and serious consequences for them and for your relationship with them if they don’t execute their role well.

There are some pretty reasonable explanations about why this happens. One is that despite your effort to send notices, educational emails, and even videos that explain who a fiduciary is and what responsibilities the role carries, experience tells us that there’s frequently a gap between what we try to communicate and what our busy clients actually hear and understand. Another explanation is that sometimes people mistakenly think that their service providers are fiduciaries and that they are not. And a third is they may think that because they’ve elected to outsource some of their responsibilities to professionals, that they are no longer fiduciaries or liable for the performance of the plan.

This is clearly a case of what you don’t know can hurt you – and others. The goal, of course, is to keep clients and their plans compliant and on track. So, in advance of the next cycle of meetings you’ll have, it might be helpful to spend time with each client on this topic. We suggest starting with a reminder of their role and responsibility, whether or not they’ve partnered or outsourced some or all of their plan and investment oversight tasks to professional fiduciaries or co-fiduciaries. Talking about this may affirm their knowledge and comfort, or it may reveal issues that need to be discussed or problems to be addressed. Either way, it’ll benefit your relationships to be a clear and knowledgeable guide as you help clients understand their fiduciary role.

Let’s talk about how we can work together to help clients put their best foot forward and keep their plans compliant and on track for long-term success.