Insurance Discount Program For Advisors & Sponsors
Risk Reduction & A Marketing Edge
Most plan sponsors lack fiduciary liability insurance and while they may not realize it, most advisors lack E&O coverage for fiduciary services provided to ERISA plans.
Many advisors who have left their B-Ds and launched their own practice have dropped their E&O Insurance. These short sighted advisors fail to realize that those who lack adequate insurance coverage and appropriate bonding will be the first to be eliminated from the RFP process by knowledgeable plan sponsors and high net worth investors.
As the advisor selection process becomes professionalized, advisors who lack E&O Insurance with affirmative fiduciary coverage (no ERISA exclusions), ERISA Investment Bonds and Employee Dishonesty Coverage will be operating at a competitive disadvantage.
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The lack of adequate E&O insurance coverage for fiduciary acts will accelerate the consolidation of advisory services and drive advisors who lack adequate coverage out of the retirement plans business. To remain competitive and stay in the game, retirement plan advisors should be proactive by affirming their coverage of fiduciary acts for others. Advisors should also be prepared for expanded vetting of their insurance policies. |
Who Qualifies For The Discounts
To ensure adequate insurance coverage, the CFDD's guide on "Evaluating Retirement Plan Advisors" notes that plan sponsors, ERISA attorneys, advisors, RIAs, consultants and B-Ds may have their policies reviewed by the CFDD's resource contributor on Errors & Omissions (E&O) Insurance.
In addition, we have gone one step further and are pleased to announce the availability of a unique first party fiduciary and E&O Insurance discount program. First party fiduciary liability insurance is purchased by plans sponsors and third party E&O insurance is purchased by advisors or their firms.
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Plan sponsors and advisors using the ERISA Advisor Evaluator (EAE) Program are pre-qualified to receive a significant discount on their respective fiduciary liability and E&O Insurance. Advisors registered for the upcoming CFDD Advisor Conference with proof of attendance qualify for the same E&O insurance discount. Professionalism has its virtues and independent of EAE usage, the CFDD has taken still another step forward. The CFDD’s current advisor clients (EAE Users & Conference Registrants) may offer the fiduciary liability insurance discounts to ALL of their plan sponsor clients. |
The discounts and coverage are important to plan sponsors and advisors. In addition to protecting plan decision makers, fiduciary liability insurance helps protect advisors from non-advisor negligence. This is important because class action litigation against employers, corresponding financial exposure, fiduciary breach claims and settlements have all increased sharply.
The discounts may be worth more than the cost of the EAE Program and the conference registration fees, but you must be a current CFDD client to qualify. To the best of our knowledge, the CFDD's Insurance Discount Program offered through NAPLIA is an industry first. Click HERE for more information on the program.
