Looking for ways to minimize the fiduciary liability that comes from offering their employees a retirement plan, plan sponsors have historically turned to firms offering 3(21), 3(38) and, most recently, 3(16) expertise. Unfortunately for these sponsors, debate within the industry has raged over which approach is best and whether some of these service providers have the right qualifications. 

The Center for Due Diligence spotlighted the issue at one of the sessions at its annual conference in Texas last fall.

"Many advisors are claiming 3(38) expertise to differentiate themselves when they have never before taken discretion of plan assets and have no performance history to meet the (investment) standards established by the plan," CFDD said in summing up part of the debate. "Advisory competition is creating so much noise that it is becoming difficult for a plan sponsor to identify a qualified 3(38) advisor from an impersonator." 

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