Investment Advice

[Guest pjb]

We are a registered investment advisor and new to the business of providing investment advice to qualified plan fiduciaries. The same clients are asking us to give investment advice to participants for a fee in a 404c plan. Our attorney is concerned about a prohibited transaction (self dealing) if we are also charging extra fees to participant accounts for their individual situations.

Does anyone disagree with our attorney's concern?

Thanks

[Jon Chambers]

Is your plan level advice fee-only or commission based? If commission based, you have a legit PT concern. If not, you may be ok to give separate advice to participants, provided your contracts are set up properly, and provided you are advising on plan assets, not managing plan assets. We are also an RIA, and have several clients that have adopted the type of structure I think you are describing, and our agreements were blessed by our counsel. But make sure you check with qualified counsel rather than relying on my post, b/c this is very technical stuff.