Tuesday, September 26, 2017

Fiduciary Responsibilities: ERISA Standards of Conduct

  • Act solely in the interest of plan participantsThis may seem obvious, but you cannot prioritize your board, president, or local community interests over the plan participants.
  • Act prudentlyThe duty to act prudently requires expertise in areas such as investment. Lacking that expertise, a fiduciary should hire someone with that professional knowledge. Fiduciaries are responsible for a decision process, not investment results. The process used to make decisions must be documented to show fiduciaries acted prudently. 

Wednesday, September 13, 2017

Active vs. Passive Investing Styles: An Age Old Rivalry

Active vs. Passive investing styles is an age-old debate in the investing world. Investment managers on either side tend to be steadfast advocates of the merits of their approach. Active managers seek to exploit market inefficiencies by relying on analytical research, forecasts, and their own judgement and experience to decide which securities to buy, hold, and sell. Passive investing involves simply tracking an index to avoid the management fees and trading costs that can be a drag on performance by adhering to a buy-and-hold strategy.

However, no one strategy always triumphs. It cannot be ignored that both investing strategies have positive attributes and have helped define the historical and current investing trends we have witnessed in the retirement marketplace.