We know that due to a lack of expertise or sufficient time to monitor the plan, it may be in your best interest to transfer a portion of your fiduciary responsibility to an investment advisor with experience in the retirement field.
If this is the case for your small business, choosing Condor Capital to manage your retirement plan would effectively reduce your level of liability by the amount of responsibility you wish to transfer. Additionally, plan participants would acquire a frequently monitored, best practices 401(k) plan that complies with ERISA standards.
Common Questions
If you are currently the plan sponsor/fiduciary for your small business's 401(k) plan, please consider:
- Is our 401(k) plan being actively monitored?
- Can participants obtain investment advice if they desire?
- Do we have all sensitive documents prepared for the DOL and IRS?
- Does our current provider coordinate with third party administrators?
- Does our 401(k) comply with ERISA and changing laws or regulations?
5 Key Qualities Of An Effective 401k Plan Fiduciary
Some key responsibilities of a fiduciary are to ensure that plans are organized, adequately implemented, and continuously monitored.
Fiduciaries are required, by ERISA regulations, to act prudently, carefully, skillfully, and diligently with regard to plan goals and objectives. For example, it is necessary for a fiduciary to diversify investments and identify factors including investment horizon, expected returns, and overall applicable level of risk.
Being in a position of increased liability, a fiduciary is accountable for the transactions made on behalf of the plan and therefore must avoid all conflicts of interest. If a fiduciary fails to adhere to ERISA and changing laws or regulations, he or she is personally liable to restore all losses that result from compliance failure.
Build a Strong Foundation
- Recognize and disclose basic fiduciary responsibilities
- Develop a thorough Investment Policy Statement (IPS)
- Maintain comprehensive plan options
Conduct Systematic Assessments
- Make prudent option selections
- Maintain investment diversification
- Exercise ongoing due diligence and monitoring
- Uphold the interest of the plan participants
Conscientious Decisions
- Inform participants about plan progress and details
- Set minimal standards and methods of communication
- Seek to maximize the value of communication
- Identify apparent communication problems, if any
Oversee Service-Provider Relationships
- Identify source of fees for the use of any external services
- Evaluate and track fund manager performance
- Maintain communication with record keepers and third party administrators
Adhere to Government Regulations
- Report to government agencies
- Uncover potential errors through annual self-audits
- Seek to avoid the mistakes uncovered during audits
- Understand the penalties for non-compliance
Types of Advisors
Condor Capital is capable of acting as your 401(k)'s co-fiduciary investment consultant (under ERISA code 3(21)) or as your 401(k)'s fiduciary investment manager (under ERISA code 3(38)).
| My Advisor... | Non-Fiduciary | Co-Fiduciary ERISA 3(21)* | Investment Advisor ERISA 3(38) | Benefits to Plan Sponsor |
|---|---|---|---|---|
| has a fiduciary duty | No | Maybe | Yes | Determines Responsibility/Liability |
| states their fiduciary status in writing | No | Maybe | Yes | Reduced Significant Risk |
| liable for selecting plan options | No | Depends | Yes | Reduced Liability |
| liable for monitoring plan options | No | Depends | Yes | Reduced Liability |
| liable for determining mapping strategies | No | Depends | Yes | Reduced Liability |
| receives transferred risk from plan sponsor | No | Maybe | Yes | Reduced Significant Risk |
| evaluates risk tolerance | No | Maybe | Yes | Reduced Plan Investment Risk |
| provides fee transparency | No | Maybe | Yes | Reduced Plan Investment Cost |
| provides advice with accountability | No | Maybe | Yes | Receives Advice |
* If a co-fiduciary assumes fiduciary responsibility by a provision in writing, plan sponsors can mitigate their liability by ensuring that the consultant/advisor shares in that liability.
The Condor Capital Difference
If you are a plan sponsor seeking to reduce your responsibility and liability under your 401(k) plan, hiring a Registered Investment Advisor (RIA) to manage plan options could prove to be highly favorable.
Having skilled investment advisors at your disposal is an asset that never depreciates. Our team of academically and professionally diverse advisors consists of certified financial practitioners holding CFA®, CFP®, and CIMA®; designations. Condor uses a team-based approach to diligently manage retirement plans, so the members of your plan gain assurance that their investments are systematically supervised by more than one investment professional.
If your small business is in search of an RIA with experts that are well-versed in the retirement field, read below in addition to contacting an advisor at Condor Capital today to learn more about how our investment managers can help your small business get the most out of its 401(k) plan.
Why Condor Capital?
Our Experience
Our advisors, holding CFA®, CFP®, and CIMA® designations, specialize in 401(k) planning and advising
Client-First Focus
As an SEC regulated RIA with a fiduciary duty, our advisors must always act in the best interest of our clients
Employee Owned
As an employee-owned company, we all have a stake in servicing you well.
ERISA Expertise
We ensure that your plan complies with existing ERISA standards in addition to new laws and regulations
Focus and Dedication
By diversifying/monitoring your 401(k) plan, our advisors work to meet all of your plan goals and objectives
Plan Evaluation
Regularly evaluating the funds allows us to make highly informed decisions when managing your investment options
Full Disclosure
Our role, source of fees, and all other important disclosures are outlined in writing