Moe Howard Posted April 25, 2001 Posted April 25, 2001 Three individual registered invesment advisors form an LLC for the purposes of providing investment advice. Those same three individuals are also the only members of another LLC (a large hardware store... which has 25 employees). The hardware store LLC has a 401(k) plan (& employer matching) with 22 participants. All accounts are "participant directed". The three members of the hardware store LLC are participants in the hardware store's 401(k). The hardware store 401(k) needs a trustee and an investment advisor .... so it appoints one of the hardware store LLC members as trustee and he hires the RIA LLC (which he is a member of) as the 401(k) plan's investment advisor. MY QUESTION: Is the fact that the trustee and or RIA, LLC are being paid by the 401(k) considered a prohibited transaction .... or does the fact that all the 401(k) accounts are participant directed prevent this arrangement from being prohibited ?
IRC401 Posted April 29, 2001 Posted April 29, 2001 IMHO the members of the LLC are foolish if they don't get some legal advice on this issue.
Recommended Posts
Archived
This topic is now archived and is closed to further replies.