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401k Right… Making ERISA Plans Serve the Interest of All Stakeholders

The Fiduciary Standards Board (FSB) has organized a campaign to address the flaws that exist in so many employer sponsored retirement plans. These flaws can injure the entire spectrum of individuals and institutions involved in the pursuit of a secure retirement for the nation’s past, present, and future workers.

This article describes:

  • The Need… Why 401k Right is important now.
  • The Stakeholders… Who benefits from 401k Right.
  • The Flaws… Where current practices need to be improved.
  • The Campaign… How 401k Right accomplishes its mission.
  • The Now Solution… What can stakeholders do right now.
Fiduciary Standards Board

The 401k Right campaign is designed to show stakeholders financially viable alternatives that are easily implemented and improve business practices, resulting in lower risk, limiting liability, increased enrichment of stakeholders and purging of bad actors who take advantage of vulnerable stakeholders.

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The Fiduciary's Existential Role

For a fiduciary to be of value to the society, community, industry and beneficiaries of fiduciary responsibility, the fiduciary must exist. The continued existence of fiduciaries has been presumed in the dialogue with insufficient consideration given to the potential for obsolescence of the fiduciary role. The existential question in considering the role of a fiduciary is simply "why?"

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To learn more about Registered Fiduciary™ Training click here

Our Mission – To develop and Maintain an up-to-date Fiduciary Protocol and to communicate the value of fiduciary relationships to the public at large.

The Fiduciary Standards Board (FSB) was established in 2000 under the name Foundation for Fiduciary Studies.

Today the FSB authorizes Registered Fiduciary - RF™ - Certifications by approving content and procedures used to certify candidates.

  • Core objectives are to deliver:
    • Efficient compliance… Lowest cost, minimum liability
    • Maximum value for clients… Highest satisfaction
  • Efficient compliance
    • Fiduciary standards encompassing all applicable regulations.
    • Process that avoids potential litigation/arbitration.
    • Low burden on advisor practice and compliance oversight.
  • Maximum value for clients
    • Take all direction client is willing to give – Warn of hazards.
    • No sacred cows – Choose best value for that client.
    • Recognize that clients have multiple goals – Each goal needs its own solution with its own risk tolerance.
  • Prudent Expert Standard of Care
    • Applicable to all Regulation, Arbitration and Litigation
      Act in the interests of clients with care, skill, prudence and diligence under the prevailing circumstances that a prudent expert acting in a like capacity and familiar with such matters would act.
  • Management of fiduciary liability and risk
    • Adopt a Careful, Skillful and Prudent protocol that ensures appropriate and timely action is taken, not simply justifying that actions taken were proper.
    • Provide the support and tools to execute the protocol.
    • Ensure correct and consistent use of fiduciary protocol under all circumstances.
  • Investment related fiduciary regulations include:
    • ERISA… Employee Retirement Income Security Act, applies to Defined Contribution and Defined Benefit plans
    • IRC 4975… Internal Revenue Code that applies to IRAs
    • IAA… Investment Advisers Act of 1940 that defines RIA/IAR as fiduciaries
    • UPIA… Uniform Prudent Investor Act that governs private trusts
    • UPMIFA… Uniform Prudent Management of Institutional Funds Act for foundations, endowments and government sponsored charitable institutions.
    • MPERS… Management of Public Employees Retirement Systems Act for state, county and municipal plans
  • Eliminating conflicts of interest
    • Without a loss of revenue or added expense
    • Incentive compensation is used to pay fees that are set at a level that is comparable to the commissions
    • Advisor earns no more and no less from commissions than from fees
  • Changes to business process
  • Adopt unambiguous fiduciary agreement
  • Set fees on a case by case basis to retain current revenue (not a pre-determined fee schedule)
  • Include both commissionable and non-commissionable assets as basis for fee calculation
  • Establish controls and oversight to enforce a fiduciary protocol
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