Fidelity Program Helps Retirement Plan Advisors and Sponsors Meet Fiduciary Obligations

BOSTON--(BUSINESS WIRE)-- Employers today are increasingly aware of their growing fiduciary responsibilities on behalf of the employees in their retirement plans. Government regulations can be complex, increase risk to plan sponsors, and often add administrative challenges to employee benefits teams and retirement plan advisors.

“When employers fail to exercise the required standard of care, and adverse expenses or investment losses are incurred, they face liability and possible claims by employees for breach of fiduciary duty,” said Jerome Ciaramitaro JD, MBA, AXA Advisor with AXA Advisors LLC of Troy, Michigan. “We urge employers who don’t have in-house fiduciary expertise to seek it from a dedicated resource, be it an advisor or an experienced third-party firm.”

In response, Fidelity Investments^® launched Third-Party Fiduciary Services, a program to help plan sponsors and advisors who consult on retirement plans with the selection and monitoring of investments while providing increased liability protection¹. The program links those sponsors and advisors who seek outside fiduciary expertise to their choice of three providers: Mesirow Financial, Morningstar Associates and Wilshire Associates.

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

Third-Party Fiduciary Services provides ERISA Section 3(21) support by offering sponsors and advisors investment selection help, continuous monitoring of funds, detailed quarterly reporting, and recommendations for removal and replacement of an investment that may no longer qualify. Together, these services help mitigate a sponsor’s risk and liability.

“Adding an independent fiduciary into the selection and monitoring of investments allows advisors and employers to focus on the objective of the retirement plan: building better outcomes for employees,” continued Ciaramitaro.

New Program Also Supports 3(38) Investment Managers

Some plan sponsors independently hire ERISA Section 3(38) investment managers to make fund selection decisions for the plan. For these sponsors, an optional offering within Third-Party Fiduciary Services enables Fidelity to accept direction straight from Section 3(38) investment managers. This option ensures that all parties – sponsor, advisor and Fidelity – benefit from an efficient and timely process.

“Fidelity continuously invests in tools, programs and services to help advisors and small to mid-sized employers simplify the administration of their retirement plans,” said Madden.

About Mesirow Financial Investment Strategies

Mesirow Financial Investment Strategies is an independent fiduciary focused on offering outsourced 3(21) and 3(38) services to recordkeepers, TPAs, broker/dealers, registered investment advisors, insurance and mutual fund companies. Through our procedural and substantive prudence, we deliver robust custom target date/target risk solutions, custom risk allocation models, custom glide path developments and retirement income solutions intended to provide the best outcomes for our clients. Advisory services offered through Mesirow Financial Investment Management, Inc. an SEC Registered Investment Advisor. For more information about Mesirow Financial, visit mesirowfinancial.com.

About Morningstar Associates

Morningstar Associates, LLC, a registered investment advisor, is part of the Morningstar Investment Management group and a wholly owned subsidiary of Morningstar, Inc. The Morningstar Investment Management group, through its investment advisory units, creates custom investment solutions that combine award-winning research and global resources with proprietary Morningstar data. With approximately $179 billion in assets under advisement and management as of March 31, 2015, the Investment Management group provides comprehensive retirement, investment advisory, and portfolio management services for financial institutions, plan sponsors, and financial advisors around the world.

About Wilshire Associates

Wilshire Associates, a leading global, independent investment consulting and services firm, provides consulting services, analytics solutions, and customized investment products to plan sponsors, investment managers, and financial intermediaries. The firm was founded in 1972, providing revolutionary technology and acting as an early innovator in the application of investment analytics and research to investment managers in the institutional marketplace. Wilshire also is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. Wilshire has grown to a firm of more than 300 employees serving the needs of investors around the world. Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations with assets totaling approximately US $7 trillion².

About Fidelity Investments

Fidelity’s goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.3 trillion, including managed assets of $2.1 trillion as of May 30, 2015, we focus on meeting the unique needs of a diverse set of customers: helping more than 24 million people invest their own life savings, and nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with technology solutions to invest their own clients’ money. Privately held for nearly 70 years, Fidelity employs 41,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

Mesirow Financial, Morningstar Associates and Wilshire Associates and their subsidiaries are not affiliates of Fidelity Investments.

Investing involves risk, including the risk of loss.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.,
500 Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
200 Seaport Boulevard, Boston, MA 02110

727945.1.0
© 2015 FMR LLC. All rights reserved.

¹ Liability protection assumes plan sponsor is in compliance with all requirements of the program, including selecting only funds that are on each respective third-party provider’s approved list and selecting funds from all required asset categories, as applicable.

² Client assets are as represented by Pensions & Investments, detailed in P&I’s “Largest Retirement Funds” and P&I’s “Largest Money Managers (U.S. institutional tax-exempt assets)” as of 9/30/13 and 12/31/13, and published 2/3/14 and 5/26/14, respectively.

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Chuck Kabat, 617-563-3365

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Source: Fidelity Investments