I recently spoke at a seminar where the question was raised about a plan sponsor’s obligations to act where they see participants have made foolish investment choices in their self-directed accounts. Is there a fiduciary obligation to tell participants that they have made an unwise investment choice?
Well, the short answer is no, there is not. That is the nature of defined contribution plans. There is a fiduciary obligation to provide appropriate diversity and sufficient options for investment. And there is a responsibility to provide some type of educational component to participants.
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