Managing Partner Jim Scheinberg recently spoke with PLANSPONSOR on best practices for monitoring retirement plan advisors, and why it’s so important.
Spectrum Investment Advisors and Wintrust Wealth Management are two advisory practices that proactively share their regulatory filings with their plan sponsor clients. They say they do so in order that their clients are aware of all of their fees , the scope of their services and to be briefed on details on their practices.
However, these advisory practices are most likely not the norm, which could present a problem for plan sponsors because the courts and the Department of Labor (DOL) have determined that retirement plan sponsors have a duty to monitor their services providers—including their retirement plan adviser or consultant, says Jim Scheinberg, managing partner and chief investment officer of North Pier Search Consulting in Marina Del Ray, California.
In May 2015, Scheinberg notes, the U.S. Supreme Court ruled in favor of the plaintiffs in Tibble v. Edison International, ruling that when a plaintiff brings a claim under the Employee Retirement Income Security Act (ERISA) for an alleged failure to monitor plan investments and remove imprudent ones, the duty to monitor starts at the time of the alleged monitoring failure. This overruled the six-year outside time limit for claims of breach of fiduciary duty in the Employee Retirement Income Security Act (ERISA)…