Participants must be able to give their investment instructions to an identified plan fiduciary who is obligated to comply with those instructions. Making sure the participants understand what they are trying to accomplish, and how their chosen funds are going to help attain their goals is critical. Allowing participants to wander aimlessly, even if you have had educational meetings is dangerous. It is important to proactively communicate, ask the right questions and keep on it until the participants understand. This ensures that your employees have interpreted and internalized the educational and investment data into something that it is useful and meaningful.
Problems occur when expectations and reality don t match.
The key is consistency, proactivity, ongoing communications and participant reassessment. Many insurance agents and mutual fund sales people are licensed to sell the right investments, but because they are not Registered Investment Advisors, they can not have certain duties officially delegated to them. The value of a good Investment Advisor, like that of a good Attorney, should never be underestimated. It was intended to require rigorous and diligent Fiduciary efforts to ensure participants are being taken care of. Don t assume your participants understand their investments, or where their current portfolio will take them because most Fiduciaries don t.