ISPP - "Investment" Roles and Responsibilities

[Guest CLEVPS]

Working on IPSP. Can someone explain definitions/differences of the following roles: Investment Manager, ERISA Investment Manager, Investment Advisor. Also, what would be the "role" of the Recordkeeper who is providing investment performance, etc. at the quarterly investment review?

[Guest FormsRmylife]

Not sure of your initials IPSP, but I think I can shed some light. The terms investment advisor and investment manager can be interchangable for SEC purposes. In order to be found to be managing accounts to qualify for making the SEC ADV filing, an investment advisor must either: (1) be a manager with full discretion over the account; or (2) a nondiscretionary manager who meets a facts and circumstances test. The test can be met by engaging in continual activities with the client, charging a fee that is under an ongoing arrangement, monitoring of investments, and executing transactions after advising a client to rebalance. A securities attorney should make the call.

Then there is the ERISA Investment Manager. This probably refers to an investment manager as defined by ERISA. ERISA § 3(38) defines an investment manager as any fiduciary: (1) who is a registered investment adviser under the Investment Advisers Act of 1940; (2) who has acknowledged in writing that it is a fiduciary with respect to the plan; and (3) who has the power to manage, acquire, or dispose of any asset of a plan.

The "'role' of the Recordkeeper who is providing investment performance, etc. at the quarterly investment review" is probably the Third Party Administrator that tracks the investments of individual participants (in a participant-directed investmetn plan) under the trust account on a daily and quarterly basis. The mutual funds, brokers, etc. involved will only be aware of what the plan trust as a whole is buying and selling. The TPA is the keeper of the participant level records. If the plan intends to comply with ERISA 404c, the TPA would be the party everyone would look to to identify when a participant should receive a prospectus due to first investment for him in a particular mutual fund.