3(38) Investment Manager

Choosing to outsource complex investment decisions by appointing a 3(38) fiduciary can be a smart decision by plan sponsors, especially when they want to save time for in-house staff and manage risk by seeking to ensure plans are fully compliant with relevant regulations.

By properly appointing and monitoring an authorized 3(38) investment manager, a plan sponsor/trustee is relieved of fiduciary responsibility for the investment decisions made by the investment professional.

According to The Employee Retirement Income Security Act of 1974 (“ERISA”), the term “investment manager” means any fiduciary who has the power to manage, acquire, or dispose of any asset of a plan; who is registered as an investment adviser under the Investment Advisers Act of 1940; and has acknowledged in writing that he is a fiduciary with respect to the plan.

Source: The Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(38)

When plan sponsors appoint the advisors of Modern Wealth Management as the investment manager delivering 3(38) fiduciary services, we make the investment decisions for the plan so that organizations can focus on pursuing their goals.

Best Practice Services

Modern Wealth Management makes the investment due diligence process seamless through a proprietary investment due diligence process. We will:

  • Assist in the development of your Investment Policy Statement (“IPS”)
  • Develop the investment line-up with your IPS as the framework
  • Conduct investment manger searches
  • Assess investment strategies to meet your plan objectives
  • Facilitate formal quarterly investment review meetings
  • Document investment decision-making rationale
  • Provide comprehensive quarterly investment reporting packages

You can rely upon Modern Wealth Management to determine whether your plan’s investments are meeting stated objectives and that any decisions or actions that result from quarterly reviews are well documented and implemented appropriately.

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.


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