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408(g) is an exemption that permits fiduciary advisers to IRA and ERISA plans to earn compensation without violating regulations that prohibit improper compensation, subject to an annual audit (and potential certification) assuring that applicable standards are met. 408(g) was written into Federal Laws by the Pension Protection Act of 2006 (“PPA”) and associated regulations issued by the Department of Labor (“DoL”) and Internal Revenue Service (”IRS”) in 2011.

This paper is one of a series intended to provide users and those considering use of 408(g) with guidance from the perspective of the independent auditor and independent expert required by the exemption.

This Paper

With the 408(g) Exemption Fiduciary Advisers are able to show verified evidence of expertise and impartiality. The independent audit documents the ongoing adherence to the standard of prudence used in providing advice.

Audit reports are based on actual client experience and examinations of results. The reports carry expert assurances that costs are reasonable, terms are favorable, securities laws are not being violated and generally accepted investment practices are consistently being used.

Marketing efforts are greatly facilitated by the regulatory mandate that communication must be clear, simple, prominent and easily understood.

This paper describes opportunities to leverage the 408(g) process to increase confidence of existing clients and make advice services more compelling for prospective clients.


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