The Advantages of a Fee-Based Independent Fiduciary

Richard Shafer pic

Richard Shafer
Image: wellandgoodria.com

Richard (Dick) Shafer is executive director of Well and Good LLC, located in Madison, Wisconsin. Under the leadership of Dick Shafer, Well and Good LLC, is a registered investment advisor to retirement plan fiduciaries nationwide — principally independent schools, colleges, and other non-profit organizations.

The terms “advisor” and “conflict-of-interest” might seem innocuous. However, they are very important when fiduciaries seek advice on plan investment decisions.

Under ERISA, a 1974 federal law that directly governs most non-public retirement plans and influences almost all other plans, a plan fiduciary may rely upon the advice or recommendations that meet certain standards. Among them: the advisor should have been duly registered, i.e., with the Securities and Exchange Commission; the advisor should accept a fiduciary responsibility to the plan and in writing, and; the advisor must act in the exclusive interest of the plan and its participants.

A plan fiduciary may consider information provided by a representative of a plan service provider. However, where there is a conflict — for instance the representative would be compensated by a provider if/how the plan fiduciary accepts the proffered service — the fiduciary may not rely upon those representations. In other words, any input from “advisor” must be considered in light of possible “conflict of interest.” Where conflict is present, the representative should disclose. The fiduciary must then reach an independent decision, whether the offering advances the (best) interest of the plan and participants.

To deliver reliable advice to plan fiduciaries, Madison WI Well and Good LLC avoids conflicts or appearance of same. Drawing upon extensive experience of Dick Shafer and other firm resources, Well and Good LLC may recommend specifically whether or nor not a plan service provider’s offer satisfies the interests of the plan and its participants. The plan fiduciary should not “rubber stamp” the recommendation. However, when the plan fiduciary reaches a decision, under ERISA it may rely heavily upon Well and Good’s advice and recommendations.