Here’s an issue that can perplex even the most experienced ERISA/401k fiduciary: What’s the difference between a broker and a Registered Investment Adviser? More importantly, does the difference significantly raise the fiduciary liability for the typical fiduciary?
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We don’t need more regulation to prevent future Madoffs, we just need common sense (and, perhaps, a tad bit more enforcement of existing regulations). Here are five straightforward rules fiduciaries can follow to avoid their own personal investment Waterloo.
The 401k fiduciary typically searches for ways to reduce fiduciary liability. This can be done by hiring what the United States Department of Labor (DOL) terms “prudent experts,” particularly in the area of investments. The DOL permits a fiduciary to appoint, among others, a registered investment adviser to reduce personal fiduciary liability.
