Fiduciary roles, explained
The numbers refer to sections of ERISA, the federal law that governs most private-sector retirement plans. They describe how much of the investment or administrative work an outside professional formally accepts. Under Department of Labor guidance, fiduciary status depends on the functions someone actually performs, not on a title.
The advisor researches and recommends investments and monitors the menu. The plan’s committee or owner makes the final decisions.
What it can take on: Fund research, recommendations and monitoring reports, with the advisor sharing fiduciary responsibility for its advice.
What stays with you: The final say on every fund decision, and responsibility for acting on, or ignoring, the advice.
A registered investment adviser, bank or insurance company with the power to select, monitor and replace plan investments, which acknowledges its fiduciary status in writing.
What it can take on: Day-to-day investment decisions. The Department of Labor says an employer that appoints one is not liable for the manager’s individual investment decisions.
What stays with you: Prudently selecting the manager and monitoring it periodically to confirm it’s managing the plan’s investments prudently and as agreed.
The plan administrator is the employer unless the plan names someone else. Some firms are hired to take on defined administrative duties, such as signing the Form 5500 or sending required notices.
What it can take on: Specific administrative tasks that are delegated in writing.
What stays with you: Selecting and monitoring the administrator, any duties not specifically handed over, and business decisions such as remitting payroll contributions on time. It is not an investment role.
| Question | 3(21) adviser | 3(38) manager | 3(16) administrator |
|---|---|---|---|
| Who picks and replaces funds? | You, using the adviser’s recommendations | The investment manager | Not an investment role |
| Is it a fiduciary for plan investments? | Yes, for the advice it gives | Yes, for its investment decisions | No |
| Handles plan administration? | No | No | Yes, for duties delegated in writing |
| Must you still select and monitor it? | Yes | Yes | Yes |
Hiring a plan advisor or investment manager is itself a fiduciary decision. You stay responsible for choosing providers prudently, monitoring them at reasonable intervals and making sure the fees the plan pays are reasonable. Fiduciaries can also be liable for a co-fiduciary’s breach they knowingly join, hide or fail to correct.
Strong Tower’s role. Eddie Valdes acts as a fiduciary plan advisor through TLG Advisors, Inc. and provides fiduciary investment management and plan administration services through various plan providers, money managers and TPAs. Typical provider arrangements include 3(38) investment management and 3(16) plan administration. Their availability and delegated responsibilities depend on the agreements; hiring providers still leaves the employer responsible for prudent selection and monitoring. Specific roles are established through written agreements.
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This page is general education about employer-sponsored retirement plans. It is not legal, tax or ERISA compliance advice and does not recommend any plan type, investment or provider for a particular employer. Plan rules, contribution limits and tax credits change, and eligibility depends on your facts; consult your ERISA counsel, third-party administrator and tax adviser.
Investing involves risk, including possible loss of principal. A retirement plan advisor or investment manager cannot eliminate investment risk or a plan sponsor’s fiduciary responsibilities. Strong Tower Advisors is not affiliated with or endorsed by the U.S. Department of Labor or the IRS.
Employer-plan services disclosure. Investment advisory and fiduciary plan-advisor services are provided through TLG Advisors, Inc. (a Simplicity company), an SEC-registered investment adviser. Strong Tower Advisors and TLG Advisors are separate and unrelated companies. 3(38) investment management and 3(16) plan administration are typically provided by contracted plan providers, money managers and TPAs; specific roles are established through written agreements. Compensation, costs, who pays and conflicts of interest are disclosed in the applicable plan service-provider disclosures and engagement agreements; not all services are free.
Prepared by Strong Tower Advisors for general education about employer retirement plans. Rule-based content is linked to primary public sources (IRS, U.S. Department of Labor and Federal Register) and is reviewed periodically because plan limits and regulations change.
About Strong Tower Advisors · Editorial and sourcing standards · Last reviewed October 2026