Financial Advisors – Why Partner with a 3(38) Investment Fiduciary?

Meet Your Clients’ Small Business 401(k) Needs—Without the Complexity and Risk

As a financial advisor, your top priority is helping your clients build and grow wealth. But what happens when your small business clients ask for your help starting a retirement plan for themselves and their employees?

Some advisors view small business 401(k) plans as an opportunity to expand into a new market. They love Ubiquity’s low-cost, investment-agnostic platform, and want the freedom to craft customized investment lineups. If that’s you, Ubiquity offers the ability to customize investment menus from all publicly traded instruments,  with 401(k) solutions designed just for startups and small businesses.

However, what if you’d like to keep your clients happy, but you don’t want to take on the time, work, and liability risk associated with managing the investments of a retirement plan? Now, there’s a simple, turnkey solution: CensiblyYours® Investment Portfolios through Kaye Capital Management.

We do the heavy lifting, so you can focus on your client relationships.

When you select a CensiblyYours® Investment Portfolio for your clients, our partner, Kaye Capital Management, takes on the role of the third-party 3(38) investment manager for the plan. They build the investment lineup and continually monitor the plan’s investments to ensure that they meet federal investment fiduciary standards.

Your clients and their employees can grow their savings with prudent investment options at low costs. We’ll help facilitate your compensation to make sure you get paid. You’ll also benefit from having a quickly deployable solution for 401(k), making you a one-stop shop for your clients’ financial services needs. Meanwhile, Kaye Capital Management takes on the fiduciary responsibilities of  managing the investments.

Protect your business with CensiblyYours® Investment Portfolios

At Ubiquity, we’re committed to helping financial advisors meet the growing need for small business 401(k) plans—without high fees, and without the work and risk.

We know that financial advisors must perform a delicate balancing act: keeping clients who own small businesses happy, without getting bogged down in the complex minutia of 401(k) plan management. That’s why we now offer 401(k) plans that include ERISA 3(38) investment fiduciary services, providing a single, simple solution.

CensiblyYours® Investment Portfolios provided through Kaye Capital Management, gives you everything you need to offer small business 401(k) plans that meet all ERISA 3(38) fiduciary investment obligations. Your clients get a low-cost and competitive index based (passive) fund lineup that has been evaluated and approved by Kaye Capital Management. Through a Risk Profile Questionnaire, employees’ risks and objectives are discovered and they are placed in the appropriate investment portfolio. Kaye Capital formally takes on the role and responsibility of ERISA 3(38) investment manager, so your clients—and your business—aren’t exposed to liability associated with the investments in their 401(k) plan. You continue to act as the face of your clients’ complete financial services portfolio, while focusing your time and energy where they matter most: growing wealth.

Why should you offer CensiblyYours® Investment Portfolios

Your clients trust you, and you want to be a resource for all of their financial services needs. Unfortunately, when it comes to helping clients establish and manage a retirement plan for their small business, things can get complicated quickly. Expanding into small business 401(k) plans can mean taking on a considerable amount of work and significant liability risk.

Under federal law, sponsors of 401(k) retirement plans have a fiduciary responsibility to their employees to choose and maintain responsible investment options with reasonable fees. Otherwise, employee lawsuits can arise. Employers, business owners, and administrators who are found to have failed in carrying out their investment fiduciary obligations will be considered liable in a court of law.

That means your client—and, depending on your role, even you—could be liable.

With CensiblyYours® Investment Portfolios, that extra effort and liability risk on the investments is significantly diminished because Kaye Capital Management takes on the role of a formal third-party 3(38) investment manager. They handle all of the legal and technical requirements to ensure that the plan’s investment lineup meets and is monitored under ERISA investment fiduciary standards. Meanwhile, you can continue to act in a manner that is in your client’s and your own best interest.

Why are more businesses using ERISA 3(38) fiduciary services?

Investment fiduciary obligations for retirement plans are spelled out in section 3(38) of the Employee Retirement Income Security Act (ERISA).

When it comes to investments, ERISA mandates that whoever is setting up and monitoring a retirement plan needs to be accountable for making responsible investment choices, defining the accountable (and legally liable) party as the “investment fiduciary.”

The federal government takes investment fiduciary responsibilities very seriously. Businesses are subject to Department of Labor (DOL) audits and investigations to verify that their retirement plans offer responsible investment options with reasonable fees. If they don’t, the business can face stiff penalties, as well as litigation from any employees who are paying excessive fees or have too few investment options that adequately match their risk-tolerance profile.

For all of these reasons, more businesses are choosing retirement plans with 3(38) investment fiduciary services so a third-party investment manager acts as a prudent investment fiduciary for the 401(k) plan.

They shoulder the responsibility of meeting ERISA investment fiduciary obligations, help build and justify the investment lineup, and continually monitor the retirement plan to make sure it stays in compliance. Third party investment fiduciaries help respond to DOL audits and maintain investment fiduciary liability insurance for the plan.

Complement your business with an ERISA 3(38) investment manager

Will a 3(38) investment manager end up competing with your business? Never. Since our inception in 1999, Ubiquity has relied on and continues to rely on financial advisors to help us get the word out to the millions of small business owners who don’t have a retirement plan. Your client relationship is an essential part of our continued success.

That said, many advisors in the 401(k) industry have taken advantage of the “outsourcing” approach to 3(38) investment fiduciary responsibilities, and this service is a way for you to do just that.

If you want to take on 3(38) duties yourself (or continue to be a 3(21) fiduciary), we’re dedicated to honoring that relationship. That’s why we still offer access to our open-trading and investment-product-agnostic platform.

However, if you want to be able to offer small business 401(k) solutions when clients request them without having to worry about the effort and risk, 3(38) investment fiduciary services are the perfect complement to your business. You can streamline your 401(k) portfolio and offer a complete solution to your small business clients — with no effort and at zero cost to you. You can maintain the face-to-face relationship with your clients and retain your standing as the single solution to all of their financial services needs. Meanwhile, in the background, Kaye Capital Management shoulders the work and risk of managing your clients’ 401(k) investments.

What’s included in CensiblyYours® Investment Portfolios?

When you work with Ubiquity, our partner Kaye Capital Management will:

  • Create a responsible fund lineup and Investment Policy Statement: Your clients will get a fund lineup with five different model portfolio options (for example: aggressive, moderate, conservative), all of which meet investment fiduciary rules.
  • Profile plan participants: Each participant will receive an Investor Risk Profile Questionnaire to ensure they select the option that best meets their risk tolerance and investment goals.
  • Continually monitor the plan: Kaye Capital Management evaluates and rebalances investments for each portfolio model at least semi-annually. That includes changing and updating investments as needed to ensure that the plan’s investment options always align with the objectives of the model portfolios, and with federal and ERISA investment fiduciary regulations.

Why partner with CensiblyYours® Financial Wellness Tools

By working with Ubiquity, you can offer your small business clients:

  • A 401(k) plan with limited risk of investment liability, since our partner, Kaye Capital Management, takes on the responsibility for meeting federal and ERISA investment fiduciary obligations.
  • A simple, comprehensive small business retirement solution with no extra effort and at no cost to you.
  • Peace of mind that comes from working with the original low-cost, flat-fee small business retirement plan provider, who has already helped hundreds of thousands of people save more than $2 billion for their retirement.


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44 Montgomery Street, Suite 300
San Francisco, CA 94104

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© 2023 Ubiquity Retirement + Savings
Privacy Policy
44 Montgomery Street, Suite 300
San Francisco, CA 94104