New research suggests a better way to communicate critical investment information.
Due Diligence
The research has been around for more than a decade. Why do regulators and the industry ignore it?
Many 401k plan sponsors aren’t aware of fee creep and how it exposes them to greater fiduciary liability. One plan’s ignorance cost it nearly a half million dollars in personal damages.
You’d trust someone who had your interests at heart. Would you give your trust to someone who didn’t? How can you tell if someone places your interests first?
Should the ideal 401k fiduciary face the problem head on or ignore it? What if there’s an easy alternative that’s already been proven to be better?
With even insiders questioning their appropriateness, it’s easy to understand why 401k plan sponsors continue to feel uncomfortable with ETFs. What exactly did these experts say?
It is this latter case that may expose the unsuspecting fiduciary to greater liability. ERISA plan sponsors interested in reducing their fiduciary liability must stay up-to-date on these developments.
The race is on between finding an adequate solution for TDFs and one sudden market cataclysm that spurs a slew of fiduciary liability lawsuits.
While one might ask why it took this product 50 years to become popular, a better question might be why had the product failed to spark much interest during those decades.
These vast unknowns inherent with Target Date Funds have perhaps created a new fiduciary liability where none previously existed.
