Life is full of stress, and all the yoga, meditation and wine in the world can’t protect us from its effects. The top life stressors—death of a loved one, getting married, job loss/new job, divorce, moving, or becoming a caregiver—are unavoidable in modern life. Some change causes stress even though it’s a positive development. Change can be positive and painful, which explains why changing the company retirement plan is one of the top stressors in the HR world. It’s human nature to avoid pain where possible, which is why the task ‘Change company retirement plan’ is at the bottom of the HR to-do list. The great news for plan sponsors is that there’s an easy way to review, strengthen, and refresh their plan, without the paperwork and upheaval that comes with a plan switch.
Incremental Not Wholesale Change
The best incremental change? Hire a new plan advisor. If you think your advisor and your retirement plan go together like a horse and carriage (to quote an old song), then you’re not alone. Most plan sponsors think the same way and assume that they need to change both at the same time. And we know how plan sponsors feel about changing plans – tax audits are more popular, and root canals are more fun. Fortunately, you can change your advisor while keeping your current plan and vendor, to your great benefit.
You Deserve An Active Advocate
The overriding goal of the plan sponsor is to maximize results and minimize fees to the most reasonable level. The goal of the typical plan advisor is to create an effective plan – and then let it ride. Yearly benchmarking ensures that fees are reasonable – but that’s it. Many advisors, especially ones whose fees are tied to asset growth, will not fix something that isn’t visibly broken. Your plan provider isn’t going to suggest changes either. Your current advisor should be actively advocating for you, suggesting suitable changes, or negotiating fees with your vendor. If he’s not, then you, the plan you’re responsible for, and your participants aren’t getting the best service.
Small Change, Big Impact
A new advisor who takes on fiduciary responsibility gives you an advocate who by contract is working on your behalf in your best interest. She’ll work with your current plan provider to reduce fees (wherever possible), liabilities, and administrative fees. She’ll even reduce the administrative burden on you, the plan sponsor, and lighten your workload by taking on more of the participant service work. Small changes like these can have a big impact – and the process of hiring a new advisor is low impact. Step one: just complete your provider’s form that designates your new advisor as the official plan advisor. There’s no step two, and no RFP required.
Are You Getting ‘It All’ From Your Current Advisor?
If a new plan is on your five-year plan, then your new advisor can help you with that too. She can help write the RFP, choose a new provider, and plan the move. She can share the work of the transition and more. If you’re still on the fence about bringing a new advisor on board, review the list below from the ForUsAll.com website, to see if your current advisor is giving you his ‘all’. If you’re not getting everything you deserve from him, then it may be time to shop around.
- “Develop the plan documents and consulting on plan design
- Select recordkeepers and TPAs, including running RFP processes if required
- Act as an investment manager who selects and monitors the plan’s mutual fund investments. Depending on the relationship, that 401(k) financial advisor may or may not be a fiduciary. (Read about the difference between a fiduciary and a broker here, and about 3(38) fiduciaries here)
- Provide advice and answer compliance questions
- Assist employees in 401(k) investment selection and financial advice
- Make your life easier by giving you and your staff more time to focus on your business
- Provide a 3(16) fiduciary who takes on plan administration services and signs the Form 5500
- Assist with annual large plan audits and Department of Labor audits
- Provide technology enabled 401(k) financial advisors that will integrate your 401(k) recordkeeper to your payroll system, reducing your administrative workload”