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The Seven Deadly Fiduciary Traps
That Jeopardize Your Money and the Secret to Covering Your Assets
Are you a Fiduciary? If so, what does it mean?
Do your employees complain about their plan results?
Are you working with an unbiased, fee-based financial professional?
Does your plan meet all of the requirements of the Prudent Investor Act? If not, what liabilities are you faced with?
Could your plan pass a Department of Labor audit? If not, what would you have to do to be able to keep the plan active?
Are you aware to what extent you are personally liable for the performance, cost, and outcomes of your retirement plan?
Synopsis: Recently, when asked by a friend to help with his company’s 401(k) retirement plan, I responded by sharing a heart breaking story about the devastating losses my best friends, their families and co-workers had suffered as participants in his company’s retirement plan. When I finished speaking you could hear a pin drop. The sheer look of panic on his face said it all – for the very first time he realized that he was personally liable and responsible for the investment decisions his employees – my friends and family – had made in his retirement plan.
Clearly, this is a conversation no business owner ever wants to deal with, particularly when all you want to do is give your employees a decent retirement benefit in exchange for service and loyalty to your company. So why worry? Because we now live in a society that seeks to place blame for bad judgment anywhere except for where it belongs – with the individual making the choice! Unfortunately, when that choice involves selecting investments within your company’s retirement plan, you’re the one on the hook – why, because you’re a fiduciary!
For the most part fiduciaries are busy executives and business owners responsible for the day-to-day grind of their company’s success. Most trust that once they have selected a plan administrator and made investment choices for inclusion in the plan that their liability to the plan is over. Unfortunately, nothing could be further from the truth. The Prudent Man Rule dictates that; “Fiduciaries are to be held to a standard of prudence requiring them to; conduct themselves faithfully and with sound judgment; they are to act with responsibility, prudence, discretion, and intelligence not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable safety of the capital as well as income invested.” Simply put, the Department of Labor (DoL) is very clear; individuals acting as fiduciaries are personally liable for the actions of their employees within their retirement plans.
It doesn’t have to be this way – it shouldn’t be this way! Your retirement plan should be the tool you envisioned it to be when you set it up – a convenient, tax-advantaged means of saving for retirement – not a liability that threatens your personal savings! Saving for your retirement in your company’s 401(k) plan should reward you with a certain peace-of-mind for planning ahead. However, doing so successfully in full view of the Department of Labor (DoL) requires a new approach – a prudent fiduciary approach!
This workshop is designed to be an eye-opening, tell-all, exposé on the most common failings of retirement plans, as told by an industry insider who used to work the system and knows exactly how the system works! You will be shocked to learn that your real-world fiduciary liabilities are answered more by asking the right questions, rather than buying product! Chances are if you have been a fiduciary for any length of time you will be able to relate to much of what is said, recognizing where you are vulnerable and ensnared by the most common fiduciary traps:
This guide is a first step toward helping you identify the underlying symptomatic problems of your retirement plan;
- When satisfying the DoL requirements for “duty to monitor” and “duty of prudence,” under what circumstances can these requirements be assigned to the plan administrator?
- What constitutes prudent and proper diversification? When should “Modern Portfolio Theory” be used in selecting investment choices within the Plan?
- Are your plan administrator’s profits your participant’s losses? Do you know how to measure and identify the “true and hidden costs” associated with operating your Plan? Who is ultimately responsible for them?
Only by tackling the true nature of your personal fiduciary liability can you begin to dispel the illusions keeping you from enjoying true peace-of-mind from your retirement plan. By completing this booklet you will be taking a big step toward fundamentally minimizing, once and for all, the fiduciary liability you face in managing your retirement plan. This guide will reveal the truths about investing; demonstrating how to use ageless wisdom, science and modern economics for growing your wealth. Product-driven financial planning is the problem, process-driven coaching is the solution.
Who Should Attend: Anyone who exercises discretionary authority or control over an investment plan. In short, this education series addresses the specific needs of trustees, investment committee members and retirement plan sponsors; providing all of the necessary tools to protect your self and your personal assets from the claims of employees, creditors and unscrupulous attorneys. This series is recommended for the strong of heart that can bear the weight of the truth!
Companion Workbook: “Fiduciary Awareness Guide; How to be a Successful, Confident Fiduciary in Three Easy Steps!”
PowerPoint Presentation: “Understanding the Dimensions of Risk & Return”
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