408(b)(17) service provider exemption - are directed trustees considered "fiduciaries"

Are services as a directed trustee considered "fiduciary" services as contemplated by this exemption? I would expect that it is really aimed at preventing self-dealing, and the residual fiduciary obligations of a directed trustee do not rise to this level.    

For anyone who or that seeks to rely on ERISA § 408(b)(17) to exempt a § 406(a)(1)(A), § 406(a)(1)(B), or § 406(a)(1)(D) (not –(C) nor –(E)) party-in-interest transaction, it’s essential to get a lawyer’s written advice.

Even when a directed trustee’s responsibility is as sharply limited as lawyers can imagine, consider that a trustee decides whether the directing fiduciary’s direction is a “proper direction[] . . . and which [is] not contrary to [ERISA][.]” ERISA § 403(a)(1).

Interpreting that paragraph and ERISA § 406(a)(1), some might say a directed trustee ought not to follow a direction to do something one “knows or should know”—exercising “the care, skill, prudence, and diligence” ERISA § 404(a)(1)(B) requires—would result in a nonexempt prohibited transaction.

If a transaction’s counterparty is the trustee’s affiliate, consider whether it might be self-interested for the trustee to be a judge of whether § 408(b)(17)’s conditions are met. Even if the directing fiduciary affirms that it finds the transaction meets § 408(b)(17)’s conditions, a directed trustee might not abdicate its own responsibility to decide whether the direction is “proper” and “not contrary to” ERISA.

If that’s a concern, there might be ways to rearrange trusteeships so assets involved in a to-be-exempted transaction are not under any trusteeship of any interested person.

This is not advice to anyone.