Investment advisory services.
Alerus Investment Advisory Services
Alerus can function in either an advisory capacity under ERISA section 3(21) or be appointed an investment manager under ERISA section 3(38).
3(21) Investment Advisor
Provides advice regarding plan investments.
- Generally one of the following:
- Broker-dealer
- Registered investment advisor
- Registered representative of the foregoing
- Other financial institution advisors may not be registered or licensed
- No discretionary investment authority.
- Appointed in writing by a named fiduciary for investment matters, may also be deemed based on services rendered.
3(38) Investment Manager
Investment manager of plan investments.
- Must be one of the following:
- Registered investment advisor
- Bank or trust company
- Insurance company qualified to do business in more than one state
- Has discretionary investment authority.
- Appointed in writing by a named fiduciary for investment matters, may acknowledge fiduciary status.
Services include:
- Developing investment policy statement
- Selecting, implementing, and monitoring your investment lineup
- Working to minimize risks in overseeing plan investments
- Investment manager searches and evaluations
- Investment committee support, guidance, and documentation
- Quarterly reporting investment lineup and regular reviews of funds and managers
Frequently Asked Questions
Are there special limits on the type of investments available to retirement plans?
Although there is no list of approved investments for retirement plans, there are special rules contained in the Employee Retirement Income Security Act of 1974 (ERISA) that apply to retirement plan investments. In general, a plan sponsor or plan administrator of a qualified plan who acts in a fiduciary capacity is required, in investing plan assets, to exercise the judgment that a prudent investor would use in investing for his or her own retirement. (ERISA Section 404) In addition, certain rules apply to specific plan types.
What is a 3(21) fiduciary?
A 3(21) fiduciary provides investment advice and recommendations to a retirement plan sponsor while the plan sponsor ultimately retains control of the investment menu.
What is a 3(38) fiduciary?
A 3(38) fiduciary has the discretionary authority to add, replace or remove investment options for any reason deemed beneficial to the plan participants.
