On October 4, 2017, Investment News published an article after interviewing Philip Chao regarding the fiduciary duty to monitor record keepers regarding their participant level distribution advice activities.
Plan sponsors have a fiduciary duty to monitor service providers such as record keepers, and some 401(k) advisers serve as fiduciaries when helping plan sponsors carry out this oversight. Whereas that oversight didn’t previously extend to detailed call-center examinations, advisers will now have to help monitor record keepers’ expanded fiduciary services, practitioners and attorneys said.
“This is new. But somebody has to do it,” said Philip Chao, principal and chief investment officer at Chao & Co. “The plan sponsor has their obligation, and they don’t know how to do it. They’re, quite frankly, not sure-footed about what they’re looking at. So we have to help them think about it.”