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Plan Fiduciary Role

What is the role of a retirement plan fiduciary?

A fiduciary is a person who owes a duty of care and trust to another and must act primarily for the benefit of the other in a particular activity. For retirement plans, the law defines the actions that result in fiduciary duties and the extent of those duties.

Fiduciaries are in a position of trust with respect to the participants and beneficiaries in the plan. A fiduciary’s responsibilities include:

  • Acting solely in the interest of the participants and their beneficiaries
  • Acting for the exclusive purpose of providing benefits to workers participating in the plan and their beneficiaries
  • Keeping reasonable expenses of the plan and always looking for areas to improve
  • Carrying out duties with the care, skill, prudence and diligence of a prudent person familiar with the matters
  • Following the plan documents and staying on top of deadlines
  • Diversifying plan investments


Why is a fiduciary important?

First, clients must realize there is a major gap in the investment-advisory industry’s standard of service. Some advisors follow a fiduciary standard, and others to a suitability standard.

The fiduciary standard requires an advisor to put clients’ interests first, generally meaning to disclose and avoid any conflicts of interest. Under a suitability standard, advisors have to believe that an investment is a perfectly fine choice for a client, but don’t have to disclose conflicts or that there are cheaper, more tax-efficient or otherwise more competitive products available. Brokers and insurance agents are supposed to adhere to this standard.

A real-life example of this: A financial advisor operating under the suitability standard with an in-house mutual fund can recommend it to a client on the basis that it is a good fund, regardless of whether there is a similar, less expensive option run by a manager who is not part of their in-house lineup. A financial advisor operating under the fiduciary standard must disclose the conflict of interest with the in-house fund, and share with the client cheaper alternatives.


The Strata Fiduciary Standard and Services

At Strata, we have exemplified the fiduciary standard since company inception in 1998. Other advisory firms waited until the Department of Labor rule came out in 2016, making it more widespread to be a fiduciary by law.

We have always found the Fiduciary Standard to be the only standard to adhere to. Our commitment to being a fully independent advisor is demonstrated by our partnering with the broker-dealer Royal Alliance Associates, which allows us to choose the most appropriate recordkeepers, administrators, and funds out there with no ties to a single manager. We work to further prove this by providing full fee, fund, and overall plan management items on an annual basis with the companies we are fiduciaries to their retirement plans. We are paid on a competitive fee or level compensation basis based on best fit for our clients. Please see below for our full list of services.


Strata's Fiduciary Services

  • New Plan Set-Up
  • Existing Plan Conversion/Takeover
  • Benchmarking of platform, fees, and services
  • Review of recordkeeper and TPA fit
  • Recommendation/monitoring of plan investment options
  • Plan Performance Review
  • Plan Compliance Review
  • Participant Education Meetings
  • Participant Enrollment Meetings
  • Participant Investment Reviews