Fiduciary Governance & Institutional Investing

Fiduciary best practices are constantly evolving, with changes occurring in the courts, legislatures and administrative agencies at both the federal and state levels. While some of these standards are clear, others may arise in unexpected ways, and pose challenges to risk-mitigation efforts.

The future financial stability of millions is in the hands of the fiduciaries of retirement and welfare plans. In order to protect those covered, plan fiduciaries must discharge their duties in the sole interests of the plan participants by diversifying plan investments in order to minimize the risk of loss, making prudent decisions and defraying expenses, all while complying with ERISA or other applicable legal requirements and avoiding ever-present conflicts of interests.

HOW WE HELP

Our clients seek our counsel when they are faced with policy, legislative, regulatory and litigation-driven changes to the scope of fiduciary status and ever-increasing fiduciary duties and responsibilities. Our experience includes serving as fiduciary counsel to a number of administrative and investment committees and boards of trustees to benefit plans, as well as public and private foundations. We regularly assist clients with fiduciary governance and structure issues, advise investment committees and other named fiduciaries, provide ERISA fiduciary training to the applicable fiduciaries and staff, and assist with documentation memorializing the procedural fiduciary process.

Seyfarth is one of the only Am Law 100 law firms that focuses primarily on the institutional investor rather than on the manager. This focus means that our attorneys are uniquely attuned to the needs of our clients for fee transparency, headline risk, options strategies, data privacy, and fiduciary responsibilities. It also means that we can energetically fight for our clients without worry about manager-side conflicts. Of particular importance to our institutional investor clients is our knowledge of ERISA, various state laws, tax, and fiduciary issues, which allow us to be an integral part of the strategic team that helps our clients succeed.

OUR SERVICES

General Fiduciary Counseling. We regularly assist clients with fiduciary governance and structure issues, advise investment committees, boards of trustees and other named fiduciaries, provide regular fiduciary training to the applicable fiduciaries and staff, and assist with documentation memorializing the procedural fiduciary process.

In this capacity, we routinely handle matters such as:

• Preparing committee charters, investment policy statements, and conflict of interest policies
• Attending committee or board of trustee meetings and counseling the committee or board of trustees regarding matters under consideration and review during the meetings
• Training committee members and boards of trustees on their fiduciary responsibilities under ERISA or state law and assisting with compliance with governing plan documents, policies, and procedures
• Briefing committee members and boards of trustees on legislative and regulatory developments
• Advising on conflicts of interest under ERISA or state law

ERISA Title I. We advise on prohibited transactions and related exemptions, request exemptions and advisory opinions from the Department of Labor (DOL), file with the DOL under the Voluntary Fiduciary Correction Program, represent clients in connection with DOL examinations (including examinations targeting the review of investment portfolios), and assist with reporting and filing obligations arising under ERISA Title I.

Investment-Related Matters. In addition to assisting with transaction issues relating to investments, we advise on fiduciary issues related to investing. For example, we assist with and document the fiduciary processes relating to requests for proposals for investment consultants and “outside chief investment officers.” We also regularly advise clients on the extent to which their fiduciary obligations allow the consideration of “environmental, social, and governance” issues when selecting an investment manager or investment product.

We regularly review alternative investment documents to determine whether a commingled fund will be subject to ERISA or state law. If such a commingled fund is subject to ERISA or state law, we review that document for compliance. Beyond this standard ERISA review, we also review the terms of an investment to determine whether they are consistent with market terms, for the purposes of satisfying general prudence requirements. Because of the volume of investments we review, we are able to easily assess whether the terms are investor-friendly, market-based, and/or out of step with the market.

THE SEYFARTH EXPERIENCE

Our interdisciplinary approach offers clients comprehensive solutions to their fiduciary challenges by bringing in other groups to assist, including our corporate and securities, real estate, tax, private equity, and ERISA/fiduciary litigation teams. As a result, our clients are advised on best practices for fiduciary governance structures and oversight.

Because of our partnership with the firm's Lean Solutions team, we are extraordinarily thoughtful about designing robust and efficient processes for fiduciaries. For example, we customize process maps for the purpose of reviewing alternative investments. The process map is instrumental for determining which parts of the process will be delegated to Seyfarth attorneys and staff and which parts will be handled by in-house legal or business personnel of our client. This process map also makes sure that we are assigning a task to the person or persons best suited to handle the task.

We also use Seyfarth’s advanced technology tools to manage the large volume of documents that are often required for good fiduciary governance. SeyfarthLink provides a single, secure place online where these documents can be collected and referenced, 24/7. Clients often use this resource to store all fiduciary-related documentation, including investment policy statements, charters, minutes, and investment-related documentation.