3(21) Fiduciary

An ERISA 3(21) fiduciary is a Registered Investment Advisory firm obligated to provide to a plan sponsor investment advice that is in the best interests of the sponsor and plan participants.

The fiduciary role is to furnish expert advice and recommendations regarding the retirement plan.

Essentially, the fiduciary evaluates investments to ensure they are prudently chosen and that the financial institution providing the plan is not charging unreasonable fees.

A 3(21) fiduciary does not exercise discretion, meaning the fiduciary’s role is only that of advisor. The plan sponsor retains the power to make changes in the retirement plan investments and remains legally responsible and liable.