February 19, 2014
Nationwide Financial Sees Growing Interest for Fiduciary Services
3(38) investment fiduciary service tops $600 million in plan assets
Columbus, Ohio - Nationwide Financial, a U.S.-based diversified financial services organization, continues to see growing interest for third-party fiduciary services. Since introducing its 3(38) investment fiduciary service from IRON Financial, approximately 400 plans with more than $600 million in assets have opted to outsource the investment selection and monitoring process.1 Changing market dynamics and evolving regulation around the role and definition of a fiduciary has led many plan sponsors to seek help from outside professionals to ensure they are meeting their fiduciary obligations.
Under section 3(38) of the Employee Retirement Income Security Act of 1974 (ERISA), an investment manager is defined as one who has full discretion for selecting, monitoring and replacing plan investments. This type of fiduciary assumes the legal responsibility and liability for the investment decisions it makes, which enables the plan sponsor to better manage and mitigate its fiduciary risk.
“Investment selection and ongoing due diligence are important and often intimidating fiduciary responsibilities for a plan sponsor,” said Joe Frustaglio, vice president of private-sector retirement plan sales for Nationwide Financial. “Plan sponsors, especially America’s small businesses, have many time constraints. Working with an expert not only reduces risk, it gives them more time to focus on running their business. At Nationwide, we strive to provide our plan sponsor clients with a broad range of fiduciary services to increase confidence and make it easier for them to offer a plan.”
“Nationwide Financial is a leader in retirement plans, and we believe our 3(38) investment fiduciary service is a great complement to Nationwide’s retirement plan platform,” said Dick Friedman, managing director of corporate retirement services for IRON Financial. “Outsourcing the investment selection and monitoring duties doesn’t just give plan sponsors more time, it also gives advisors more time to work with their plan sponsor clients to increase overall plan performance.”
While there is growing demand for outside fiduciary support, ERISA has always permitted plan sponsors to delegate some fiduciary responsibilities and liabilities. Nationwide provides its clients a full array of fiduciary education and support services. Nationwide Financial offers fiduciary support services through its Fiduciary Series, Fiduciary Warranty, Morningstar® 3(21) Fiduciary Service, Nationwide ProAccount® Discretionary Managed Account Service and the ANB Trust Full Discretionary Trustee Retirement Service.
About IRON Financial
IRON Financial, LLC is an independent asset management firm with deep expertise in delivering liquid alternatives with absolute returns to investors, combined with boutique-level service. IRON provides fiduciary and retirement solutions to a broad array of defined contribution plans and investment intermediaries. We serve clients including publicly traded companies, privately held entities, union and non-union plans, and not for profit organizations. Under section 3(38) of ERISA, the plan sponsor may shift the liability for the investments in the plan to a qualified third party. IRON manages the entire investment process and menu offering which provides the plan sponsor the strongest transfer of liability available in the qualified plan arena.
Nationwide Mutual Insurance Company, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides customers a full range of insurance and financial services, including auto insurance, motorcycle, boat, homeowners, pet, life insurance, farm, commercial insurance, annuities, mortgages, mutual funds, pensions, long-term savings plans and specialty health services. For more information, visit www.nationwide.com.