tag:blogger.com,1999:blog-14224910.post4037203047608636545..comments2024-02-14T11:11:09.643-05:00Comments on Nevin's Data "Points": The Duty To AskNevin E. Adams, JDhttp://www.blogger.com/profile/07162580850277740193noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-14224910.post-83912490980805197572010-07-26T14:14:05.435-04:002010-07-26T14:14:05.435-04:00Nevin,
This case is the best demonstration of the...Nevin,<br /><br />This case is the best demonstration of the value of having an appointed discretionary fiduciary manage the plan assets. <br /><br />Most folks I run into do not understand the difference, nor the importance of our model. If this plan were being managed by a firm like Deschutes, my firm, or one of the other 200 or so investment fiduciaries I know, that is how few we are, this would not have occurred. <br /><br />We are appointed by our clients as the discretionary ERISA 3(38) Investment Manager. Thus, we assume all the investment selection risk on behalf of the client. We become the investment committee. Not only do we not allow funds with revenue sharing, we are always seeking to minimize cost and maximize the potential for future investment income, BECAUSE WE ARE LIABLE. <br /><br />I think it is telling that neither was HFS named as a defendant and the judge placed no relevance in their advice because both the plaintiff's attorneys and the judge realize that HFS is not liable for their "advice." <br /><br />If we were the 3(38) Investment Managers for the Edison plan, and someone did decide to sue for some issue, the lawsuit would have been charged to US, not Edison nor their employees. <br /><br />Unfortunately, Edison fell victim to using folks they felt that they could rely on. However, that business model cannot guarantee fiduciary isolation for the sponsor, only ours can.Tim Woodhttp://www.deschutesadvisors.comnoreply@blogger.com