Plan sponsors have a fiduciary responsibility

Well done on "Plan producers shy away from fiduciary insurance," an excellent, timely article in the March 24 issue.

Well done on “Plan producers shy away from fiduciary insurance,” an excellent, timely article in the March 24 issue. Plan sponsors had better get the message that they have a distinct fiduciary responsibility.

Yes, they would have to pony up money to protect themselves, but I would guess that the insurance premiums are less than the penalties a court can impose on a sponsor for not fulfilling lawful obligations. I agree with the comment from Jason Roberts, a lawyer with Edgerton & Weaver LLP in Hermosa Beach, Calif., that if the sponsor doesn’t want to pay for the insurance, he can find another financial adviser.

On a parallel track, how many investment advisers don’t have errors-and-omissions insurance on their own practices? The answer might surprise you.

I think that the comment by Terrence Morgan, an adviser at and president of Oklahoma City-based OK401k Inc., about Russian-speak with his clients is evidence that many (inexperienced) advisers have to learn how to educate their clients better. That is part of the challenge of being more than a mediocre shoe salesman in disguise.

The qualified-plan education available at the Center for Fiduciary Studies in Sewickley, Pa., which leads to an accredited investment fiduciary analyst designation, is virtually a must for anyone considering involvement with retirement plan advising.

Tom Grzymala
Principal
Forensic Analytics LLC
Keswick, Va.

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