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Step 12: Invest & Relax

• Avoid the impulse to react to market volatility • Minimize investment costs and taxes In contrast, broker-dealers and commission-based financial professionals are not fiduciaries. When providing investment advisory services, they are not held to the same legal standards as RIA’s. Some brokers clarify their lack of fiduciary responsibilities in their contracts. Before hiring an investment advisor, it behooves an investor to ask questions and do some research on the fiduciary requirements of the financial advisors they are considering.

Fiduciary Protection in Retirement Plans Fiduciary protection is fundamentally important to enhancing returns in retirement plans. The Employee Retirement Income Security Act (ERISA) is a federal law that is enforced by the Department of Labor (DOL). ERISA section 3(38) allows employers or retirement plan sponsors to delegate their personal responsibility and liability for selecting and monitoring a plan’s menu of investment options to a designated ERISA 3(38) investment manager who is obligated to act as a fiduciary in the truest sense of what ERISA requires: “an entity that legally must act with the sole purpose of benefiting the plan participants and beneficiaries.” This is an appealing option for companies who are not comfortable with taking on the fiduciary risks inherent in this role, especially in light of new DOL regulations on fee disclosures. By assuming the fiduciary role, a 3(38) investment manager can reduce the legwork and burdens that usually fall upon the company.

Index Funds: The 12-Step Recovery Program for Active Investors  

This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...

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