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3 responses to “Exclusive Interview with Fred Reish: 401k Plan Sponsors Who Fail to Properly Evaluate Fees “at Risk””

  1. Richard Glass

    Great interview, Christopher. I wish you would have asked Fred how fiduciaries can evaluate the quality of a provider’s products and/or services unless they evaluate the effectiveness of those services and products. Further, if the desired effectiveness is not achieved, doesn’t a prudent process require the fiduciaries to explore what went “wrong”?

    I’ve never seen Fred, in any of his articles, provide detailed examples of a prudent process or why he feels “success metrics such as participation, deferral rates and retirement readiness [are] not a fiduciary activity”. As he knows, just because the regs don’t specifically mention a task, it doesn’t mean that fiduciaries don’t have to perform it. After all, “success metrics” do measure quality.

    I would appreciate your insights on my perspective.

  2. Larry Elford

    Thank you for the great “fiduciary” topic. It begins to address the elephant in the room in my opinion, which is: “Intentional financial abuse of the public by persons posing as professionals.”

    Methods of gaining peoples trust, and then violating that trust as well as violating their financial health is two violations. Sadly, it is also the unspoken business model of far too many in the financial services industry. I know, I was inside for 20 years. I watched it all. I also noticed that at no time was one able to have an honest conversation in the industry about victimization of clients, about professional or systemic abuse.

    I left the industry after trying my best to reveal, and getting beaten up fairly badly for my efforts. Today I spread awareness about professional financial abuses, tricks and traps. On a positive note, I now see many clients who are getting their money back after becoming informed and aware.

  3. David Schultz

    Richard, I don’t proport to speak for Fred, but of course some of what you want him to detail in an article are the services Fred provides for a fee. Fred’s efforts appear to be focused on helping fiduciaries to recognize and understand their responsibilities. He is right that there is no one right answer, so the proper process can be different for different plans. Even without the details, he is providing an important service to Plan Sponsors.

    As to “why he feels “success metrics such as participation, deferral rates and retirement readiness [are] not a fiduciary activity””, I believe it is because, under the law, such things are not fiduciary activities. Since contributions to 401(k) plans are generally participant driven and there is no legal obligation for a plan sponsor to offer any contribution, how can these items even be judged by a fiduciary standard? Participants fail to contribute for reasons that are their own – legitimate and completely otherwise – as do plan sponsors. Can someone be in a fiduciary breach because employees decide to spend their money on vacations, cars, big screen TVs, or necessary medical treatments instead of 401(k) deferrals? That said, a retirement plan is an important employee benefit; one would hope that plan sponsors would recognize the direct benefit they receive by offering employees a robust and successful retirement program. Once the employee decides to contribute to the plan (or the company contributes on the employee’s behalf), now there is a need for a fiduciary duty to ensure that the fiduciary is investing and spending the employee’s money prudently.

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