Our (Brightwork Partners) most recent survey of 600 advisors active in 401(k) gathered information on advisor perceptions about their fiduciary status to plans, the extent to which plans are covered by a formal 3 (21) or 3(38) fiduciary services agreement and whether those services were being provided directly by the advisor or by a third party fiduciary such as Mesirow. Nearly 7 advisors in 10 (68%) now think of themselves as fiduciaries on the plans they service, up five points from the prior year. Heavy or Specialist advisors (defined as deriving 60% of total practice income from 401(k)) are the likeliest to see themselves as such (80%), though the Light or Occasional advisors (less than 20% of practice income from 401(k)) are catching up rapidly (63%, up nine points from the year).

Advisors report that about two-thirds of their plans are covered by a written 3(21) fiduciary services agreement. Of those plans that service is provided directly by the advisor 63% of the time with the balance provided by a third party fiduciary, now widely available on leading provider platforms. Another 8% of advisors serviced plans are covered by a written 3(38) fiduciary agreement, most often by the advisor directly, consistent with the growing presence of RIAs within the 401(k) advisor community.

Total Plans and 3(21) Fiduciary Status

Base: have at least one plan

Including plans you sold in the past 3 years how many plans do you have altogether with assets of...

Of your (#plans from Q35) plans, how many are covered by a written 3(21) fiduciary agreement, either directly by you or through a third party? How many of those agreements are directly with you? How many are through a third party?

By: Ron Bush