Advisor services seem to be drifting farther away from the ERISA Safety-net that many Plan Sponsors have become accustomed to.
In a recent article by Fred Barstein in WealthManagement.com, he points out that there may be no issue for an ERISA plan advisor to offer wealth services to participants when the service is fully disclosed and there is permission granted by the plan sponsor. However0 there is an issue when the underlying ‘assets being recommended are proprietary or result in increased revenue.’
The article references ‘a prominent lawyer explained to me that these arrangements are legal as tested in the Loews’ case involving AON if there is proper disclosure.’ There is apparently a distinction that can be made with a carefully crafted disclosure!
Plan Sponsors should be aware of the distinction and the relief they may be granting to advisors. Read Mr. Barstein’s article here.
