Advisor Compensation - Spouse

As a TPA, I am working with an advisor that is looking to set up a retirement plan for his spouse's company (with employees). Does this cause any fiduciary issues if the husband is charging a fee to the plan? It would seem like it is bordering on a prohibited transaction. If it is permitted what would he need to do to show the fees are reasonable?

ERISA § 3 [29 U.S.C. § 1002]        Definitions

(14)  The term “party in interest” means, as to an employee-benefit plan—

(A)    any fiduciary (including, but not limited to, any administrator, officer, trustee, or custodian), counsel, or employee of such employee-benefit plan;

(B)     a person providing services to such plan;

(C)     an employer any of whose employees are covered by such plan;

(D)    an employee organization any of whose members are covered by such plan;

(E)     an owner, direct or indirect, of 50 percent or more of—

(i)       the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation{,}

(ii)     the capital interest or the profits interest of a partnership, or

(iii)    the beneficial interest of a trust or unincorporated enterprise,

which is an employer or an employee organization described in subparagraph (C) or (D);

(F)   a relative (as defined in paragraph (15)) of any individual described in subparagraph (A), (B), (C), or (E);

(G)   a corporation, partnership, or trust or estate of which (or in which) 50 percent or more of—

(i)    the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation,

(ii)   the capital interest or profits interest of such partnership, or

(iii)  the beneficial interest of such trust or estate,

is owned directly or indirectly, or held by persons described in subparagraph (A), (B), (C), (D), or (E);

(H)  an employee, officer, director (or an individual having powers or responsibilities similar to those of officers or directors), or a 10 percent or more shareholder directly or indirectly, of a person described in subparagraph (B), (C), (D), (E), or (G), or of the employee-benefit plan; or

(I)     a 10 percent or more (directly or indirectly in capital or profits) partner or joint venturer of a person described in subparagraph (B), (C), (D), (E), or (G).

. . . .

(15)  The term “relative” means a spouse, ancestor, lineal descendant, or spouse of a lineal descendant.

https://www.govinfo.gov/content/pkg/USCODE-2024-title29/html/USCODE-2024-title29-chap18-subchapI-subtitleA-sec1002.htm

Many recordkeepers will not allow a plan to have no advisor.  I wonder if it would still be considered a breach if the advisor took no compensation from the plan?

That an investment-adviser firm’s representative gets no direct or indirect compensation might not be good enough if the representative is an owner of the firm, or otherwise has some interest regarding the firm’s compensation.

This is not advice to anyone.