What does ERISA say about retirement plan advisers’ fiduciary standard of conduct?
faq 2020-01-15

ERISA requires advisers who provide “investment advice” to serve as fiduciaries to their clients, meaning that they must act with prudence and loyalty, diversify client assets and follow plan documents.

A financial professional satisfying the duty of prudence acts “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” (ERISA 404(a)(1)(B)).

A duty of loyalty requires that advisers act solely in the interests of the participants for the “exclusive purpose” of providing benefits and defraying costs. ERISA currently prohibits fiduciaries from completing transactions that involve conflicts of interest, unless they disclose the conflicts and operate under the oversight of an independent fiduciary.

Related Questions

What do you think?

MOST ASKED

Subscribe

Get unlimited access to investmentnews.com

Starting at $4.95 a week for 4 weeks

SIGN UP

Pay just $4.95 for the first 4 weeks