Fidelity Offers Fiduciary Services

Advisers and sponsors have three investment support providers to choose from.

Fidelity has launched Third-Party Fiduciary Services, a program to help retirement plan advisers and sponsors with the selection and monitoring of investments. Users have a choice of three support providers through the Fidelity program: Mesirow Financial, Morningstar Associates and Wilshire Associates.

“We are hearing loud and clear from plan advisers and sponsors that they want additional fiduciary support with investments,” Phil Chisholm, vice president of defined contribution management at Fidelity, tells PLANADVISER. “Commission-based advisers are restricted from acting as a fiduciary, and advisers who can act as a fiduciary might prefer to focus on other aspects of a plan, such as plan design and participant education, or they might not generate enough revenue to take on the fiduciary liability.”

As to why Fidelity selected Mesirow, Morningstar and Wilshire to partner with, Chisholm says the firm started out with a much broader list and ultimately selected these three fiduciary partners for their “well-known names, depth and breath, and scale.” This is the first time Fidelity has offered fiduciary services to sponsors and advisers, he says.

Ted Madden, senior vice president, sales, at Fidelity, adds: “Our new program enables advisers and smaller clients—often family business, startups and companies with limited staff—to spend more time helping employees take advantage of workplace benefits and less time on administrative details. Fiduciary responsibility and liability protection require a high level of expertise. By offering a choice of third-party providers, our adviser and employer clients can align with the firm that best meets their specific fiduciary needs.”

Users can opt for either 3(21) fiduciary support, whereby the service provider helps the adviser and sponsor select investments, monitor them and recommend changes—or 3(38) fiduciary support whereby the financial adviser takes the reins and makes discretionary fund selection decisions for the plan.