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10 March 2010


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Gary Allen

Adam, a very good post and I agree with your comments completely. Both types of fiduciaries serve a good and valuable service. I often hear people say the extra cost of a 3(38), however as a practicing 3(38) I do not find our services or those of other 3(38) advisors we know to be more expensive than a traditional 3(21) or even a non-fiduciary advisor. We often find our pricing structure to be similar or less than much of the competition out there. I guess the real question in my mind is, are we charging too little or are others charging to much for their services?

John Haley

Great article Adam. Keep up the good work!

With a 3(21) Fiduciary, if very specific advice is given and the client chooses to follow that advice, would you agree that most of the Fiduciary liability rests with the advisor? What percentage would you estimate? (Tough questions to answer I realize)

My Best,

John O'Reilly

Agree with Gary Allen - 3(38) is competitively priced and often less expensive, sometimes much less expensive. Of course often a cost comparison is pretty much impossible due to a lack of transparency with mainstream plans.

Since a 3(38) typically has a fee schedule, it means that the percentage cost automatically lowers as assets increase. In a mainstream plan, the plan sponsor has to cry bloody murder and be moved to a different class fund with lower revenue sharing rates.

It still shocks me that "the mainstream is the mainstream". How have they kept their stranglehold. Has there ever been a comparison more lop-sided than the mainstream to a 3(38) plan? Yet it continues to be a struggle to convince plan sponsors.

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