A 3(21) fiduciary offers investment advice but the plan sponsor retains ultimate decision-making authority and liability. A 3(38) fiduciary has full discretionary control over investment decisions and assumes the associated liability, relieving the sponsor. Three factors to consider before recommending a role:
- The sophistication of the sponsor's governance structure, thin committees with limited investment expertise may not be well-suited to a 3(21) relationship.
- Plan size and complexity.
- The sponsor's appetite for fiduciary liability.
