Critical Considerations in Selecting the Right Retirement Plan Advisor
The decision of selecting the right retirement plan advisor can easily slip under the radar. For personnel serving as plan sponsors, juggling fiduciary duties alongside their other responsibilities can be quite challenging. However, among their numerous tasks, perhaps the most critical decision they face is selecting the right retirement plan advisor. This decision is vital as it significantly impacts the success and management of the retirement plan.
At the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held on the UCLA campus, Fred Barstein, founder and CEO of TPSU, interviewed Anita, a finance director for a small nonprofit organization. Anita highlighted the realization that her organization should conduct fiduciary due diligence on their record keeper and advisor, despite having worked with them for over 20 years. She acknowledged the need and desire to assess whether they could obtain better services and fees.
Although record keepers and advisors may not proactively lower fees, it’s important for organizations to initiate these discussions. Initiating these discussions can lead to valuable insights and potential cost-saving opportunities for organizations.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, founder and CEO at TPSU and 401KTV. Just completed a program here at the University of Denver, and I am here with one of our outstanding attendees. Anita, welcome Anita.
Anita:
Hi. Thanks for having me.
Fred Barstein:
Okay if we ask you a few questions?
Anita:
Sure.
Fred Barstein:
Okay. Before we do, tell our audience a little bit about yourself and the role that you play at your organization.
Anita:
I’m Anita, and I am the finance director for a small nonprofit. We are an association, and we have about 55 employees currently participating in our plan.
Fred Barstein:
Great. So, one of the things you talked about was you realized the need to do fiduciary due diligence on your record keeper and your advisor. Can you explain to us what you are talking about?
Anita:
Well, our organization has been with both our fiduciary or our advisor and our record keeper for probably more than 20 years.
Fred Barstein:
Wow.
Anita:
And, I don’t think anybody has ever… I’ve only been with my organization a couple of years now, and I’m finally starting to look at things and I’m realizing that I don’t think anybody has ever asked the question, “Should we be doing something differently, or could we have a better advisor?” And, I think, “Could we have better fees? Could we be receiving better services?”
So, it’s just that realization that we really should be doing this, and we really should be looking at going about and doing an RFP and recompeting it. However, with a smaller organization, we don’t have a procurement department, so I don’t have anybody that I can say, “Hey, so write me up an RFP and make sure you include all the things that I need in there.” It’s going to have to be something that I’m going to have to research and do it on my own.
Fred Barstein:
Right to do it or there is help out there to do it, But it is, no doubt things have changed in 20 years.
Anita:
Yeah, exactly. And so, are we getting the best value for our buck at this point? Are we getting the services that we need as an organization?
Fred Barstein:
And record keepers and advisors, and this is not being negative. They’re not going to proactively say, “Hey, we’re going to lower your fees,” right? You have to ask, and they will. It doesn’t mean you have to change, but you want to make sure you do it. It’s great insight. Thank you, Anita. Final question, couple of things you learned other than this due diligence that you’re going to need to do.
Anita:
I really liked the idea that was thrown out about how you’re marketing your retirement plan. Not saying that come to a retirement training, but how about some… We want to help you have a secure financial future and getting folks to think of their retirement as being securing their financial future rather than it’s retirement. Because folks that are in their early twenties and thirties, they’re not thinking about retirement at this point in time, but they are thinking about having a secure financial future.
Fred Barstein:
And some freedom.
Anita:
Right. Exactly.
Fred Barstein:
And choices.
Anita:
Exactly. That goes along with that. So, it’s just better PR, I guess.
Fred Barstein:
Right. Good. Well, thanks for your time. Thanks for attending. And, thank you for watching 401KTV. Please stay tuned.
