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What Makes an Outstanding Retirement Plan Advisor?

The Retirement Advisor Council (RAC) recently released a report on the value Outstanding Plan Advisors bring to Plan Sponsors. The report was based on the findings of over 400 plan sponsors who participated in a questionnaire administered in December of 2016. Participants who responded to the questionnaire had at least 100 employees, included 401(k), 403(b), profit sharing and money purchase plan sponsors.

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Defining an Outstanding Plan Advisor can be a bit subjective and often varies based on the needs that a Plan Sponsor may have. In this study, the intent was to define an outstanding advisor by determining if the advisor was able to add significantly in aligning business interests with those of the plan participants. A plan advisor was defined as outstanding if s/he caused CFO’s of the survey to feel this way about their plan:

  1. More confident with the plan’s investment array

  2. More confident their plan complies with applicable rules, regulations and stated policies

  3. Find it easier to administer their plan

  4. Have a good handle on their fees their service provider and investment managers are charging

  5. Confident their fees are reasonable

We think the five items outlined above are a good place to start in defining an outstanding advisor. However, we believe there is more that can be done to add even greater value to a Plan Sponsor. Accepting Fiduciary responsibility in a signed agreement as a 3(38) Investment Fiduciary, 402 Named Fiduciary and 3(16) Plan Administrator are examples of added value. Developing meaningful educational opportunities for plan participants to succeed with their 401(k) goals and their overall financial well- being help create a trust and bond of loyalty between a plan participant and the plan sponsor. The point is that outstanding advisors have the ability to recognize needs of the Plan Sponsor and Plan Participants and provide simple and complete answers to those needs.

At the end of the day, a plan sponsor should be able to say that because of their advisor, they are able to spend less time administering their plan and more time doing their job running their organization; and that is what doing a retirement plan right is all about.

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