Why 3(38), 3(21) and 3(16) services are more important than ever, and why advisors are so confused about each.
This video titled “Richard P Friedman Iron Financial” is a brief interview conducted by 401(k) Specialist at the 401k Summit in Las Vegas. The interview features Richard Friedman of Iron Financial, discussing the distinctions between fiduciary services, specifically 3(38) and 3(21) fiduciary solutions, in the context of 401(k) plans.
Key points discussed in the video include:
- Fiduciary Services: Friedman explains the differences between 3(38) and 3(21) fiduciary services, with 3(38) providing discretion and full liability outsourcing, whereas 3(21) is more of an advice-based service where the plan sponsor retains investment fiduciary responsibility.
- Importance of Understanding: Friedman emphasizes the need for plan sponsors to understand these distinctions to make informed decisions about which fiduciary service best fits their plans.
- Selecting and Monitoring Fiduciaries: He also talks about the importance of plan sponsors prudently selecting and monitoring 3(38) fiduciaries, as they cannot be held liable for the actions of a properly chosen and monitored 3(38) fiduciary.
- Time Management: The video also touches on the practical benefits for advisors, such as time management, by outsourcing fiduciary responsibilities, which allows them to focus on other relevant aspects of their work.
This video provides insights into fiduciary services within the 401(k) landscape, helping plan sponsors and advisors navigate their responsibilities.