By Mark Olsen, Managing Director at PlanPILOT
Choosing the right advisor is essential for employers who want to offer their employees a high-quality retirement plan. The right advisor can help plan sponsors navigate the complex world of retirement planning, keep them up to date with the changing landscape of legal and regulatory requirements, and verify that the plan meets the needs of the company and its employees. However, not all advisor partnerships are created equal, and plan sponsors need to assess the suitability of potential advisors before making a decision. Read on to learn more about what to look for in a qualified plan consultant and how you can make the best decision for your company.
Client Services
A clear and effective client services model is essential for building a successful partnership between the plan sponsor and advisor. Plan sponsors should ask potential advisors about their approach to client service, including their communication and reporting practices, and how they handle your questions and concerns.
The advisor should have a well-defined client services model that aligns with your expectations and needs. This includes flexibility with virtual versus in-person meetings, proactive decision support when significant regulatory changes occur (e.g., SECURE 2.0), as well as the availability of online resources, such as educational materials and calculators. A commitment to client services is the foundation for a strong advisor partnership.
Conflict-Free Business Model
Another important factor to consider when assessing the suitability of advisor partnerships for retirement plan sponsors is the advisor’s business model. Plan sponsors should look for advisors who have a conflict-free business model, which means they don’t receive any compensation from third-party providers for recommending their investment products or services. This is important because it ensures that the advisor’s recommendations are based solely on the best interests of the plan sponsor and its participants, rather than any financial incentives.
You’ll also want to assess whether the advisor is acting as a fiduciary and if so are they willing to put that in writing in the client agreement. A fiduciary is an advisor who is legally obligated to act in the best interests of the plan sponsor and its participants. Fiduciary advisors must avoid conflicts of interest, disclose all fees and compensation, and provide impartial advice. Be sure to ask potential advisors if they are fiduciaries and how they plan to fulfill their fiduciary responsibilities.
References and Reputation
Anyone can say they are a fiduciary with a robust client services model, but the proof is truly in the pudding when it comes to whether they can back up those statements with a strong reputation and positive client references. When assessing the suitability of advisor partnerships for retirement plan sponsors, it is crucial to consider the advisor’s years of experience, client feedback, responsiveness to client questions, communication skills, and the number of clients serviced.
Plan sponsors should also ask potential advisors for references and speak to current or former clients about their experiences working with the advisor. This can provide important firsthand knowledge about the advisor’s strengths, weaknesses, and overall suitability for the plan sponsor’s needs. Through speaking with references, you can gain a more complete picture of the advisor’s capabilities to be confident you’re making an informed decision.
How PlanPilot Can Help
At PlanPILOT, our well-developed client services model, commitment to conflict-free business, and stellar reputation have set us apart from other qualified plan consultants for over 20 years. We are dedicated to creating and maintaining the best plans for you and your employees. If you’re ready to take the next step with your employer-sponsored retirement plan, we would love to hear from you. Call us at (312) 973-4913 or email mark.olsen@PlanPILOT.com to get started today.
About Mark
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k), 403(b), and 457 plan sponsors. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, Stable Value Investment Association, and CUPA-HR.