Our 3(38) Investment Fiduciary Solution
IRON’s comprehensive qualified retirement plan solution is designed to effectively shift a significant portion of the Plan Sponsor’s liability. The hiring of a 3(38) Investment Fiduciary alters the Plan Sponsor’s fiduciary responsibility as the liability now relates to the choosing and monitoring of a 3(38) Investment Manager.
IRON’s Added Value
IRON is an ERISA 3(38) Investment Fiduciary that has received a CEFEX accreditation. Industry confirmation of our methods, processes and metrics is important to Broker Dealer firms and Plan Sponsors. Many ERISA attorneys caution Plan Sponsors that the hiring of an imprudent 3(38) Investment Fiduciary does not mitigate risk, it adds to it.
Plan Sponsor is engaged in a contractual relationship with IRON as the contractual fiduciary.
IRON creates a customized Investment Policy Statement that roadmaps the investment methodologies. Using proprietary methodologies, IRON selects a well-balanced and diversified menu of plan investments and monitors those investments in a defined timeframe. Replacement of fund options as necessary in accordance with the Investment Policy Statement.
Each plan receives a Quarterly Fiduciary Investment Review that details fund metrics, rankings at a plan level and actionable items for the next quarter.
IRON does not use proprietary products. Unless limited by platform options, we do not default a participant into a platform owned or sub-advised mutual fund. IRON is privately owned.
- Some other 3(38)’s are owned by the platform that offers their service
- IRON’s 3(38) solution does not use proprietary mutual funds
- Some platform level 3(38) Investment Fiduciaries are required to use platform owned funds or sub-advised funds
IRON’s CEFEX Certified 3(38) Investment Fiduciary Solution provides added value to the Plan Sponsor, Plan Advisor and Plan Participant. Based on the Plan’s criteria, IRON ‘s differentiated value proposition sets us apart from the competitors. Not all 3(38) providers are created equal; much of the competition is focused on the 3(38) fee with little emphasis on Investment Plan outcomes.
Are You a Fiduciary?
Individuals become fiduciaries through appointment or function. The Department of Labor (DOL) defines what is covered investment advice under the rule. Covered investment advice is defined as a recommendation to a plan, plan fiduciary, plan participant and beneficiary and IRA owner for a fee or other compensation, direct or indirect, as to the advisability of buying, holding, selling or exchanging securities or other investment property, including recommendations as to the investment of securities or other property after the securities or other property are rolled over or distributed from a plan or IRA.
Covered investment advice also includes recommendations as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, selection of other persons to provide investment advice or investment management services, selection of investment account arrangements (e.g., brokerage versus advisory); or recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made.
Under the final rule, the fundamental threshold element in establishing the existence of fiduciary investment advice is whether a “recommendation” occurred. A “recommendation” is a communication that, based on its content, context, and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. A section 3(38) Investment Fiduciary can protect both the Plan Sponsor and the Advisor/Broker.
WANT TO UNDERSTAND THE DIFFERENCE BETWEEN A 3(38) FIDUCIARY AND A 3(21) PLATFORM SOLUTION?
Download our Comparison Guide to find out.