So-called “socially responsible” investing is not automatically incompatible with abiding by one’s fiduciary duty, however, the cases where it is acceptable are narrowly defined.
Due Diligence
These are the times it’s most important for fiduciaries to learn how to say “no” to clients who feel compelled to set their own best interests aside just to chase investment performance. No one is saying that’s an easy job.
Investing through mutual funds, including TDFs, is like using mass transportation. It’s not ideal but for many it’s the only realistic choice.
With the pain of the Target Date Fund 2008/09 market crash debacle still lingering in the mind, to best assess the potential fiduciary liability inherent in TDFs – no matter what safes harbors were promised by the PPA – it’s critical that 401k plan sponsors understand what’s good about them, what’s bad about them, and just why they’re so popular.
Ultimately, it will be the tort bar that offers the enforcement and the subsequent consequence for poor decision making on the part of plan sponsors and service providers. Rest assured all sides will be discover the regulatory fence in their once open fields.
Viewing this content requires a Basic (Free) Membership or better. You are not currently logged in. If you have an
Between using past performance to suggest future results and using forecasts to try to time the market, which is the lesser evil?
Do 401k plan sponsors know the fiduciary minefield they’re stepping into when they select a QDIA?
Should you stay or should you go? The answer is so obvious you don’t have to ask your hairdresser to know for sure.
The evolution towards more effective retirement planning is already underway, and many fiduciaries are breathing a sigh of relief because of it.
