The plaintiffs in fiduciary liability cases can end up with big settlements, so it's no wonder a growing number of retirement plan advisors are taking steps to safeguard themselves.
Their first line of defense? Clearer service agreements that leave little doubt about exactly what services they provide and which are subject to the fiduciary standard of care as defined by the Employee Retirement Income Security Act. Practically as important nowadays: agreements in which services not covered by the fiduciary rules also are spelled out.
"ERISA is clear to sponsors: you are under a duty to know the relevant investing information … and if you don't have that skill, you are required to hire it out," said Jason Roberts, who, as CEO of the Pension Resource Institute, has drafted a couple thousand service agreements defining registered investment advisors' fiduciary obligations to sponsors.
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