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ERISA Advisory Opinion Finds Brokers May Be Liable for Self-Directed Plan Investment Losses
The Department of Labor's Advisory Opinion 2005-23A is a wake-up call for brokers providing advice to participants of self-directed plans. Analyzing ERISA statutory language, the advisory opinion holds that where a participant engages a broker to regularly provide advice for a fee on how to invest self-directed account assets based on the participant's individual needs, the broker will be liable for imprudent advice. The broker will be so liable even if it is the participant who actually must direct the trustee of the plan to make the investment on the participant's behalf.
Source: U.S. Department of Labor, December 7, 2005
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Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
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Always consult an attorney and/or investment advisor when building and protecting your wealth.
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