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When is providing investment advice a fiduciary function?

More and more employers are offering participants help with making informed investment decisions. This may or may not be a fiduciary function, depending on the type of information provided.

Employers may decide to hire an investment adviser to offer investment advice tailored to individual participants. These advisers are fiduciaries and have a responsibility to the plan participants.

However, if an employer or service provider provides general financial and investment education that is general in nature, it is not acting as a fiduciary.  This may include interactive investment materials or information based on asset allocation models.

The decision to select an investment adviser or a service provider offering investment education is a fiduciary action and must be carried out in the same manner as hiring any plan service provider.

For more information, please see the Interpretive Bulletin on Participant Investment Education.

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