What defines when a broker or investment advisor becomes a fiduciary under ERISA?

A broker or investment advisor becomes a fiduciary under ERISA primarily through the "Fiduciary Advice Rule." This rule establishes that an individual providing investment advice for a fee or other compensation related to assets held in an employee benefit plan falls under the definition of a fiduciary. This means that they are held to a higher standard of care and are required to act in the best interests of the plan participants and beneficiaries, prioritizing their interests above their own when giving advice.

The Fiduciary Advice Rule specifically delineates the conditions under which someone is considered to be giving fiduciary advice, focusing on the nature of the advice given and whether it is intended to be used for investment decisions in relation to ERISA-covered plans. This clarity is essential because it ensures that those who manage or advise on such plans are accountable for their actions, ultimately protecting the interests of participants and beneficiaries.

In contrast, the other options represent different facets of investment advising and fiduciary responsibility but do not specifically define the conditions that establish fiduciary status under ERISA. Understanding the distinction is key, as each element plays a role in the broader context of fiduciary duties but does not encapsulate the definition of when fiduciary status is activated.