Qualified Professional Asset Manager (QPAM)

Key points
* A QPAM is a registered investment adviser (RIA) that manages institutional retirement assets and can rely on an ERISA exemption to engage in transactions otherwise prohibited for plan-related parties.
* QPAMs commonly handle pension plans and private placements, and may also manage real estate and other alternative investments for plan clients.
* Qualification criteria are set by the Department of Labor’s QPAM exemption and include registration, minimum capital/AUM thresholds, fiduciary acknowledgment, and a clean legal record.

What is a QPAM?

A Qualified Professional Asset Manager (QPAM) is an RIA—often a bank, insurance company, or other institutional asset manager—that manages retirement plan assets for institutional clients. When a manager meets QPAM conditions, the manager and counterparties can rely on a prohibited-transaction exemption under ERISA to complete certain transactions that would otherwise be barred because of conflicts of interest.

How QPAMs interact with ERISA

ERISA generally prohibits certain transactions between a retirement plan and parties that have conflicts of interest with the plan. The QPAM exemption allows plan sponsors, fiduciaries, and counterparties to proceed with specific transactions (including private placements and some dealings with affiliated entities) when an independent QPAM negotiates and approves the terms on behalf of the plan. In practice, a QPAM vets deals, negotiates terms, and makes plan-level decisions to protect the plan from prohibited self-dealing.

Qualification requirements

The QPAM standards are set out in the Department of Labor’s prohibited-transaction class exemption for transactions determined by independent QPAMs. Core requirements include:
* Registration as an investment adviser (typically with the SEC).
* Sufficient shareholder’s equity, net worth, or other capital and minimum assets under management as specified by the exemption.
* A written acknowledgment that the manager is acting as a fiduciary for the client plan.
* Authority and responsibility to negotiate, approve, and decide whether the plan will enter the transaction.
* No convictions or adjudications for conduct that would impair the manager’s financial trustworthiness or eligibility.

What investments can QPAMs assist with?

While QPAMs are primarily associated with retirement plans, they may also manage plan investments in:
* Private placements
* Real estate and real-estate-related investments
* Other alternative investments that could trigger ERISA prohibited-transaction concerns without a QPAM determination

Purpose of ERISA (brief)

ERISA is intended to protect employee retirement assets by imposing fiduciary duties and prohibiting certain self-dealing or conflicted transactions. The QPAM exemption is a narrowly tailored mechanism that allows qualified managers to facilitate transactions for plan clients while preserving ERISA’s protective goals.

Oversight and reliance

• The Department of Labor administers the QPAM exemption and maintains guidance on qualification criteria; it also maintains a list of managers relying on the exemption.
• RIAs serving as QPAMs are subject to securities regulation (e.g., SEC registration requirements) in addition to DOL oversight for ERISA-related matters.

Bottom line

A QPAM is an RIA that meets Department of Labor criteria to act as an independent fiduciary for retirement plans, enabling certain otherwise-prohibited transactions (notably private placements and other complex investments). Meeting QPAM standards provides a compliance framework that lets institutional plans access a broader set of investment opportunities while maintaining ERISA protections.

Sources
* U.S. Department of Labor — QPAM exemption guidance and amendments
* Investment Advisers Act (framework for RIA registration and regulation)