1. SEVEN DEADLYTRUSTEETRAPS
WHAT YOU
NEED TO KNOW
SEVEN DEADLY
TRUSTEE TRAPS
Not knowing you
are a fiduciary
1. The duty of loyalty
2. The duty of prudence
3. The duty to diversify investments
4. The duty to follow plan documents
1. Act solely in the best interest plan participants and their beneficiaries.
2. Act for exclusive purpose of providing benefits to participants.
3. Use the skill, care and prudence of a“Prudent Expert.”
Know your role
Hire an outside
professional manager
Brokers are fiduciaries to the Broker/Dealer to which they are registered-
not to the Plan Sponsor’s plan.
Stock picking, marketing timing, track record investing is futile if one is
wanting to beat the market. This active approach robs not only investors of
return but POM
404C offers relief for Plan Sponsors, but requirements are more than just
multiple fund choices. Plan Sponsors can refer to Dept. of Labor (96-1)
interpretative bulletin 404C.
Portfolios/Mutual Funds/Stocks have costs that are often hidden from the
Participant/Plan Sponsor. These costs can diminish returns and have an
impact on the portfolio.
There are only two investment philosophies that an investor can choose:
either Markets Work or Markets Fail. This choice can result in investing
Peace of Mind.
Delegate your
responsibilities
Use free market
portfolio coupled with
investor education
Read the 404C checklist
Have an FMIA/CA done
to understand these
costs
Participate in The
Educational Workshop:
Separating Myths
Relying on a broker
for investment advice
Not knowing
what your
responsibilities are
Utilizing active
management
Relying on section
404C for reduction of
liability
No true
understanding with
cost of fee inside
portfolio
Lack of an investment
philosophy
WHAT YOU
CAN DO
1
2
3
4
5
6
7