What fiduciary duties can be delegated with a 3(38) investment manager?

Last updated October 2, 2026

Appointing an ERISA 3(38) investment manager transfers discretionary authority over investment selection and monitoring to the manager, who accepts fiduciary status in writing. The committee sheds responsibility for individual investment decisions but keeps the duty to prudently select and monitor the manager.

ERISA Section 3(38) allows plans to appoint a qualified investment manager — a bank, insurance company, or registered investment adviser — that acknowledges fiduciary status in writing and takes discretion over the plan menu.

Compare the two adviser models:

  • 3(21) adviser: recommends; the committee decides and stays on the hook for each decision.
  • 3(38) manager: decides; responsibility for individual fund selection and replacement shifts to the manager.

What never leaves the committee: the duty to prudently select the manager and monitor them — reviewing performance against the IPS, fees, and adherence to mandate. Delegation narrows the surface of your fiduciary risk; monitoring keeps the delegation defensible.

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