The “co-fiduciary” advisor: Buyer beware
Given the recent press and media attention, as well as Congressional investigations regarding retirement plans, many plan sponsors have become aware that the advisors to their plan should be fiduciaries to their plan. This has not fallen on deaf ears in the retirement plan industry, which has created a new marketing gimmick: the co-fiduciary.
The phrase co-fiduciary” has been used to turn non-fiduciary broker-advisors to retirement plans into fiduciaries. However, the term has nothing to do with the legal meaning of a co-fiduciary under ERISA law.

Brokers/advisors using””co-fiduciary” in their brochures, accept no transfer of responsibilities, so there is no mitigation of liabilities for the plan sponsor. Such brokers/advisors simply refuse to accept the significant responsibility and liability for the selection, monitoring and replacement of plan investment options. This refusal leaves the plan sponsor standing alone.

The “fiduciary warranty”
There are plan providers offering another marketing gimmick, the fiduciary warranty. This ‘warranty’ covers only one aspect of liability and conveniently does NOT cover excess fee litigation. This exemption is convenient because excess fees are a major complaint of participants today. Again, the plan provider will NOT agree to be fiduciaries to the plan.