10 ways nonfiduciary advisers can work with 401(k)s
Methods of nonfiduciary 401(k) expansion
The F-word — fiduciary — is all the rage in the 401(k) space right now, especially with respect to providing investment advice, but advisers ought to know they don’t necessarily have to be fiduciaries in order to be valuable to a plan.
Take it from Jason C. Roberts, chief executive of Pension Resource Institute, a firm that helps broker-dealers navigate the thorny side of ERISA law and find a way for advisers of all stripes to participate in the 401(k) market.
Not all reps will be able to act as a fiduciary — perhaps they don’t meet their firm’s asset requirements to be considered a 401(k) specialist. Still, those same reps might have a handful of plan clients to whom they’re very committed and wish to provide services.
As long as these reps have their broker-dealer’s blessing to proceed with the relationships and provide service, they can still provide value to their 401(k) clients without accidentally providing fiduciary advice.
He warns, however, that reps who push nonfiduciary services and feature them in their required fee disclosure documents need to be ready to deliver.
”It’s good to get into the door and use these buzzwords and show you’re more valuable than the next person, but now you’re committing to that work,” Mr. Roberts said. “You need expertise and scale. Don’t just go and render high-touch services because you can.”
Here are 10 ways advisers may consider expanding their services.
(By Darla Mercado)