Old Slip Capital has announced the opening of its new office in Miami, FL, a strategic move expected to bolster the company's growth prospects. Alongside this expansion, the firm has issued a crucial advisory for plan sponsors, emphasizing the advantages of employing ERISA Fiduciary Advisors over Standard Brokers or Advisors.
The advisory, issued by James Lukezic, Managing Director at Old Slip Capital, aims to clarify the significant differences between ERISA Fiduciary Advisors and Standard Brokers. According to Lukezic, many plan sponsors mistakenly believe that merely having an advisor is sufficient. However, a Standard or Retail Advisor often provides arm's length advice without assuming liability or responsibility. In contrast, an ERISA Fiduciary Advisor not only offers guidance but also absorbs the liability, including personal liability for investment committee members.
The advisory highlights the growing scrutiny from plaintiffs’ class action lawyers in fiduciary breach lawsuits, the Department of Labor in ERISA plan audits, courts, and insurers. This increased attention on procedural due process has intensified the need for plan fiduciaries to stay current with best practices in plan governance. The actions or inactions of committees and individual investment committee fiduciaries are now examined in greater detail, making it imperative for plan sponsors to understand their fiduciary responsibilities thoroughly.
Old Slip Capital emphasizes that the role of an ERISA Fiduciary is crucial for the success of retirement plans. Fiduciaries are categorized into Trust Fiduciaries, Administrative Fiduciaries, and ERISA Fiduciaries, with the latter being the most critical. The ERISA Fiduciary acts as the linchpin, guiding the investment committee and significantly influencing the plan's success.
The advisory also points out that effective fiduciary governance requires more than subject matter expertise. Time commitment is equally important. Directors, even those with the necessary expertise, often lack the time or inclination to fulfill fiduciary roles beyond oversight. Additionally, the advisory cautions against allowing the Board of Directors to act as the Investment Committee, a common but flawed governance structure in many employer-sponsored plans.
This announcement by Old Slip Capital serves as a pivotal reminder for plan sponsors to reassess their fiduciary strategies and consider the significant benefits of hiring ERISA Fiduciary Advisors. By doing so, they can ensure better governance, reduce personal liability, and ultimately enhance the performance of their retirement plans.
Disclaimer: This press release may contain forward-looking statements that describe future expectations, plans, results, or strategies. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
