Fiduciary Governance Blog

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Bank v RIA as Investment Advisor: A Cost-Benefit Analysis

Many investors ask, “Is it better to have a big bank (Goldman Sachs, for example) as my investment advisor or a Registered Investment Advisor (Bel Air, for example) to manage my money?” Following is a summary of the costs and benefits of each. The best investment platform should be determined by each investor’s unique preferences and…

UPIA §2(c)(6) re Other Resources of the Beneficiary

The Conundrum: Question: Should the investment policy and distribution rate from a trust be informed by assets held by the beneficiary that are outside the trustee’s responsibility or control?   Predictably the answer is… it depends. However, in most cases it is fair to say, “The trustee is obligated by statute to consider other assets, income,…

Will ERISA Trustees ever learn? or “I guess they aren't that smart at Princeton”

The Duty: An ERISA trustee is obligated to know who is being paid what by whom and whether the fees being paid are fair and reasonable. This duty is implicit in the trustee’s duty of prudence under C.F.R. §404a-1 and is specifically required by the U.S.C. §1104(a)(1)(A)(ii). The Breach: The ERISA plan trustees at Boeing…

How is a targeted return like UBER?

A trustee would not get into an Uber until they defined the destination for their ride. A trustee would not hire an employee without describing at some level the work the employee was being hired to do. So then, why do so few trustees communicate a targeted rate of return to the investment advisor to…

The Emperor Has No Clothes

The investment industrial complex does not want you to know how to evaluate its members. If it did you would have easy access to the following data: Each investment advisor would establish a target rate of return that could be measured against in future years. Each investment advisor’s portfolio would be compared to several reasonable…

Is my investment advisor doing a good job?

It’s difficult to answer the question, “Is my investment advisor doing a good job?” Predictably, all investment advisors report that they are “doing great” and are “above average.” They all provide compelling charts, graphs and benchmarks…