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Many small and medium-sized businesses utilize the services of a third-party financial services professional, to assist with the initial adoption of a 401(k) retirement savings plan – including the selection of the service provider to manage the plan and/or the investment alternatives selected for inclusion in the plan. But, in so doing, the majority of small and medium sized business owners rarely understand their fiduciary obligations for the ongoing monitoring and periodic evaluation of those initial selections.
The unfortunate reality is that the way most financial services professionals are compensated, they simply are not properly incented to perform the ongoing investment monitoring and due diligence required under ERISA. So, if a plan fiduciary relies upon a financial services professional that has the skill to perform as an investment expert – but fails to do so, they may inadvertently breach their fiduciary duty – by not being prudent or diligent in relying upon such individuals.
That is where Fiduciary Insight comes in, whereby we have created a web-based service bureau that bridges this gap by providing remote investment monitoring, reporting and management services. Our solutions are designed to protect retirement plan fiduciaries from potential liability, by delivering a range of services for the routine administration of investments held within 401(k) retirement savings plans.
Perhaps more importantly, as investment professionals, eFiduciary Advisor can insure any potential liability with professional errors & omissions insurance policies. As a result, if we are deemed to be imprudent the resulting claim (and its defense) would be paid from an insurance policy - versus being a corporate liability. So, don't leave yourself and your assets exposed!