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Practice Management

Fiduciary Duty Concerning Investments

Q. What does the Department of Labor (DOL) say about fiduciary duties concerning investment providers? 

A. A fiduciary is responsible for selecting investment providers and the investment options for the plan, and for monitoring their performance. Some plans, such as most 401(k) or profit-sharing plans, can be set up to permit participants to choose the investments in their accounts (within certain investment options provided by the plan). If the plan is properly set up to give participants control over their investments, then the fiduciary is not liable for losses resulting from the participant’s investment decisions. The DOL also requires that participants have sufficient information concerning investment options so they can make informed decisions.