Fiduciary Responsibilities
Premier Financial Group provides written acknowledgement of our fiduciary relationship with you, and we deliver fiduciary support services.
These are characteristics that set us apart from other investment advisors – and provide additional liability protection for you.
“Pension plan fiduciaries can protect themselves, or at least greatly reduce their exposure to fiduciary liability, by adhering to a properly established prudent process which, if correctly followed, will shield fiduciaries from liability regardless of whether their actions result in investment losses.”
James D. Kemper & Jason E. Levine
Lawyers with Ice Miller
An employee benefits law firm specializing in ERISA and fiduciary services
As a trustee and fiduciary of your business retirement plan, you are personally liable for the prudence used in the investment selection process, both in trustee-directed and participant-directed accounts. This is a responsibility many trustees and plan fiduciaries are unaware of – and a role that is often not well understood.
Who and What Is a Fiduciary?
The term “fiduciary” is used to characterize a relationship of good faith, loyalty and trust.
When Congress enacted legislation setting up business retirement plans, it intended a broad definition of “fiduciary.” This definition goes beyond those listed as a plan trustee – you may be a fiduciary and not know what your role is.
Your actions may define you as a fiduciary. If you act in a way that exercises discretion over the plan or its investments, then you are a fiduciary. When you select investments for your plan, or appoint an investment advisor to make those selections, you are a fiduciary.
In addition to those who act as fiduciaries because of their function within your plan, there are also “named fiduciaries” under ERISA (Employee Retirement Income Security Act), whether or not they actually act with respect to the plan.
Why Is Fiduciary Status Important to Me?
Fiduciaries of a business retirement plan are charged with carrying out their duties prudently and solely in the interest of plan participants and plan beneficiaries.
A fiduciary who is found to have breached his or her duties – either through action or inaction – under ERISA is personally liable for losses caused to plan participants and/or beneficiaries.
How Do You Reduce Your Fiduciary Liability?
The best protection you and other plan fiduciaries can provide for yourselves is to work with an investment advisor who understands ERISA and Department of Labor requirements, who will help you understand your role and help reduce your risk, and who will act as a co-fiduciary of your plan.
Premier Financial Group provides these services.
As a SEC Registered Investment Advisor, Premier is held to the fiduciary standard with every client. Not all advisors in the financial services industry are held to this standard. When Premier acts as your plan’s advisor and co-fiduciary, you and plan participants can expect us to:
- Put the interests of the plan and its participants above our own.
- Never mislead you and other plan fiduciaries, or your participants.
- Fully disclose to you, in writing, the cost of our services.
- Provide you with all important information relevant to your decision-making process, thus reducing your fiduciary risk.
- Use an evidence-based, prudent, and time-tested investment strategy.
- Provide independent and objective advice.
Premier’s Co-Fiduciary Relationship
Whether it’s for your personal finances or your plan’s investment direction, Premier Financial Group believes that you should demand a co-fiduciary relationship with your advisor.
We believe that this role is that important. Why?
A co-fiduciary relationship will:
- Help you manage your fiduciary responsibilities.
- Share your exposure to potential risk and personal liabilities.
Keep in mind that it is a fiduciary’s actions and processes that will put your plan under scrutiny – either from a regulatory agency or your plan’s participants. While investment loss may be at the root of participant discontent, it is your decision-making process that will be examined by all parties and the courts.
In approaching our co-fiduciary role for your plan, Premier always assumes that your plan will one day undergo this type of examination. So we take steps to ensure that your decision-making process is transparent and well documented.
Premier Financial Group has committed significant resources to developing a proprietary, formalized documentation process. Decision-making processes are clear, clearly documented, and able to withstand regulatory and participant scrutiny.
As Kemper and Levine pointed out, these prudent processes will “shield” fiduciaries “regardless of whether their actions result in investment loss.”
Premier puts its beliefs in writing. We provide a clear and concise co-fiduciary agreement, helping you have financial peace of mind about your potential risk and your business retirement plan.
