A Cascading Behavioral Roadmap for Fulfilling Fiduciary Duties
By Neal Shikes, CRPC®
Fulfilling fiduciary duties is an outcome of successfully integrating processes and methodologies that require different skillsets. All major decisions should be made with ONLY the economic interests of the plan participants in mind. Failure to do so increases the likelihood of a breach of fiduciary duty.
Here is a Plan's Sponsor's road-map to successfully fulfill fiduciary duties:
It is important to note that all outcomes and breaches of fiduciary duty /fiduciary responsibility fulfillment cascade from the above four tasks.
Methodologies that are consistent with the IPS and free of conflicts of interest, need to be created and applied to:
In addition, Plan Sponsors/Investment Committees need to follow ERISA Class Actions and it should be integrated into a continuing education program. Initially, however, the following needs to be accepted:
Breaches of Fiduciary Duty and their poor outcomes tend to originate from poor behaviors and decisions that create a negative cascading effect on a Retirement Plan. A simple impact analysis can reveal whether the Plan Sponsor's/Investment Committee's behaviors and methodologies is having a positive or negative cascading effect on a Retirement Plan.
Neal Shikes has been a Registered Financial Services Industry professional for over 20 years and a Chartered Retirement Planning Counselor, CRPC®. He is also the "Willing Fiduciary" (http://willingfiduciary.com/) associated with Counsel Fiduciary LLC (http://counselfiduciary.com/) and the "Trusted Fiduciary" (http://www.trustedfiduciary.com) and principal associate for Thornapple Associates a provider of Expert Witness Services (http://thornapple.net/).
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