Granite Group Advisors -


2016-09-27 :: Make your 401k great again!
The reason for Executive Involvement.

Granite Insight  executive decisions

The reason for Executive involvement.

Whether you are Democrat or a Republican the DOL does not care! At this point, almost everyone (including us) has commented ad nauseum on the impacts and issues of the new Fiduciary rules on brokers and advisors in the handling of corporate retirement plans.  

A key deadline is April 10, 2017 .

The issue:

The fiduciary concerns of the Plan Sponsor and advisor, acting in a fiduciary capacity are disclosure, responsibility and process.  From these, we would like to specifically address the investment process.

Why is this important?

The consequences of the Tibble vs Edison decision were not just about having the lowest fee share class available, but also about how the Plan Sponsor arrived at the decision to place a mutual fund in the investment line up. We believe this was the game changer in the industry; the greatest fiduciary exposure to the Plan Sponsor lies in having a defined and defensible investment process

What should I know about my investment decision process for the plan now?

Many brokerage, mutual and advisory firms will sell a proprietary product. They will justify that fund by showing you a Morningstar report or fund fact sheet. In our minds, that doesn’t cut it. Those documents are an opinion (often self-serving) but not a process adopted by the plan.   Your investment process should move beyond the proprietary products.

What can I do to protect my company?

What are the key components or guidelines of a rational investment process? In straightforward terms, you need to think of  three components: selection, monitoring and replacement guidelines.  These include an overarching set of evaluation criteria over a rational timeframe or review period.

Having a consistent process that can be applied to all fund selections, would help a Plan Sponsor meet the Tibble vs Edison criteria; and it leads the Plan Sponsor on a path to meet their new guidelines of fiduciary responsibility.

Fundamentally,  it is our belief that investment decisions should be made at the top, and not necessarily by implementers or overseers.  The potential financial risks are great, and the owners/executives need to be actively involved; not only in the establishment, but on the execution of these decisions. The reason is simple: ERISA litigation has opened up to suits against smaller and mid-sized companies and plans, including the investment executives.

For Truth, Transparency and Safety call Ernie Rodulfo: 

Granite Group Advisors at  203-210-7814.



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