Investment advisor contracts with 401(k) plans and/or participants

[Guest apriljl]

I have some general questions about plans and/or participants that contract with investment advisors to provide advice and/or management of a participant's retirement plan assets. What is the typical arrangement between the plan sponsor and/or the participant and the investment advisor? If there is anyone who has dealt with these types of arrangements, please advise as to what is usually provided for in these arrangements in terms of responsibilities of each party. Thank you.

[mbozek]

There is no typical arrangement. The terms depend on the what the plan provisons allow and the risks that the plan fiduciaries want to avoid. The plan administrator needs to retain counsel to limit plan's liability for investment advice provided by participant's advisor in a 404© plan.