The Self-Directed Brokerage Account option was established to provide pension plan participants with access to greater investment choices and a fiduciary relationship through investment advisory services. Employee Retirement Income Security Act of 1974 (ERISA) section 3(21) and 3(38), provides that when an individual pension plan participant hires an investment advisor, they are fiduciaries under ERISA section 3(21) and 3(38).
An ERISA section 3(21) fiduciary is an advisor who provides investment advice for a fee with respect to any investments of a pension plan. A fiduciary duty is owed to each pension plan participant by the investment advisor under the ERISA rules; if they exercise any authority or control over the management of the pension plan assets in return for a management fee. As a fiduciary, the investment advisor is responsible to:
- Understand pension laws and plan provisions;
- Diversify assets based on specific risk/return profile of client;
- Prepare investment policy statement;
- Select money managers and document due diligence;
- Control and account for investment expenses;
- Monitor the activities of money managers; and
- Avoid conflicts of interest and prohibited transactions.
True North Financial Advisors represents investment advisors who act as ERISA 3(21) and 3(38) fiduciaries when managing participant retirement assets within a Self-Directed Brokerage Account – Brokerage Window. These investment advisory services are provided through self-directed brokerage accounts for plan participants whose pensions are administered by the following financial institutions:
- Alight Financial Solutions (FRS Investment Plan) – Self Directed Option
- Schwab – Personal Choice Retirement Account (PCRA)
- Fidelity 401(k) – BrokerageLink®
- TDAmeritrade – Self Directed Brokerage Account (SDBA)
- State Street – Self Directed Option
- Chase Investment Services – Self Directed Option
- TIAA-CREF – Self Directed Option
A financial advisor can provide investment advisory services concerning qualified retirement plan assets to determine the appropriate investment allocations in your retirement plan based on an investment policy statement designed to reach your True North.
