AIF - Step 3 – Implement | Study Guide Questions & Expertly Verified Answers, 2025 | 2026.

AIF - Step 3 – Implement | Study Guide Questions & Expertly Verified Answers, 2025 | 2026. Quiz_________________? Name the three areas of fiduciary duty - Answer all areas of fiduciary duty come into play in this Step: the duty of loyalty, of care, and utmost good faith. Quiz_________________? True or False: When setting up a new ERISA plan, for example, the advisor may be directly involved in coordinating the work of the plan sponsor and various service providers, including investment managers. - Answer True Quiz_________________? True or False: Working with ERISA plans as a 3(38), selecting service providers is less complex than working with individual clients - Answer False: an advisor working with ERISA plans as the 3(38) investment manager, the role of selecting other service providers will likely be more complex and involved than when working with individual clients. Quiz_________________? Regardless of the situation, when an investment advisor is recommending investment strategies, individual stocks, bonds, or other securities, and outside money managers or other service providers, they are expected to do what three things? - Answer the advisor is expected to define, document, and consistently apply sound due diligence to select or recommend investment strategies, individual stocks, bonds, or other securities, and outside money managers or other service providers. Quiz_________________? What are the four roles of a custodian? - Answer (1) hold securities for safekeeping, (2) report on holdings and transactions, (3) collect interest and dividends, and, if required, (4) effect trades. Quiz_________________? What three step process is the best for demonstrating due diligence in the selection of service providers? - Answer Request, Receive, Evaluate Quiz_________________? Is a market survey permissible due dilligence for when reseaching a service provider? - Answer Yes: However, simply requesting information, such as by using a market survey, is also permissible. The key is to gather sufficient information from an adequate number of service providers that addresses their capabilities, costs, and ability to address security requirements. Quiz_________________? Why are safe harbors highly desired by fiduciaries - Answer safe harbors are highly desired by fiduciaries because they mitigate fiduciary risk. Quiz_________________? True or False: safe harbors provide clear and certain methods for reducing legal or civil liability - Answer True: while there may be alternative approaches that would not constitute breaches of fiduciary duties, such as avoidance, safe harbors provide clear and certain methods for reducing legal or civil liability. Quiz_________________? Are safe harbor voluntary - Answer Yes: Safe harbors are voluntary. A fiduciary choosing not to rely on available safe harbors bears the associated risk and consequences. But with risk often comes rewards. The requirements of safe harbors are deemed to be prudent even in the rare event when applying a safe harbor may cause losses for the end investor. Quiz_________________? What are the 5 distinct safe harbors available to Investment Fiduciaries under ERISA? - Answer 1. The 405(c) Safe Harbor, or general safe harbor provisions related to delegation of investment decisions 2. The 404(c) Safe Harbor 3. The Fiduciary Adviser Safe Harbor 4. The Qualified Default Investment Alternative (QDIA) Safe Harbor 5. The Automatic Rollover Safe Harbor