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Legal analysis: Why the Yale 401(k) letters, limits aside, should raise an alarm to plan sponsors

Ayres may not have it all letter perfect but his basic points have a legal basis

Author Guest Columnist Ron Rhoades August 19, 2013 at 5:27 AM
1 Comment
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Ron Rhoades: Here is the rub: the plan sponsor has great difficulty holding the "retirement plan consultant" to account, given the low standard of conduct applicable to measure the potential liability of a non-fiduciary consultant.

401(k) Stories

Stephen Winks

Stephen Winks

August 19, 2013 — 11:40 PM

Indeed plan sponsors beware. If the brokerage industry and product vendors are not responsive to the needs of the plan sponsor who is held to a fiduciary standard of care on behalf of their employees, then could there not be a better case for RIAs to fill the leadership vacuum in support of professional standing the plan sponsor demands?

Large scale institutionalized support for fiduciary standing is more likely going to come from very large RIAs like CapTrust or New England Pension Counsel which advise well over $100 billion in assets. This level of expert fiduciary counsel can not be replicated in a brokerage format regardless the size of the broker/dealer.

Disaffected brokers who seek professional standing may have no choice but to seek affiliation with expert counsel.


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