Making the Right Move: Tips for Switching Your RPA
One of the most crucial choices that a plan sponsor must make is selecting the appropriate advisor. ERISA 401(k) and 403(b) plan sponsor fiduciaries are required to perform documented due diligence on all service providers paid through plan assets including their RPA. In the world of advisors, there are more amateurs than there are individuals pretending to be experts. More and more, plan sponsors are starting to doubt if they have chosen the correct advisor for their plan.
There are many things to look for when choosing an RPA, but the most important question to ask your retirement plan advisor to determine if they are really acting in your best interest is: Should I hire an independent 3rd party to conduct due diligence on you?
If the answer is no, it’s time to consider a change. The good news? The Plan Sponsor University now offers a new service, Retirement Plan Advisor Due Diligence, (rpaDD) which offers a benchmarking, a Request for Information (RFI) and an Request for Proposal (RFP). These tools enable Plan Sponsors to find confidence that they are covered against possible litigation.
Upon the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held at The University of Loyola MD, Founder and CEO Fred Barstein, spoke with Plan Sponsor, Ricka Wood, an HR Manager at a company of about 67 employees. For Ricka, the time for an advisor switch had been long overdue. One of the benefits of changing advisors, has been what Ricka feels is an increase in engagement and education from their new advisor. “They took time to meet with us,” she says “… they educated us on what it means to be a fiduciary.”
Read the Full Transcript Here
Fred Barstein:
Greetings. This is Fred Barstein, founder and CEO of TPSU and 401K TV. Just completed a TPSU program here in the Baltimore area at Loyola University. And I am here with Ricka. Okay if we ask you a few questions?
Ricka:
Sure.
Fred Barstein:
Very good. So before we do, tell us a little bit about yourself.
Ricka:
My name’s Ricka. I am an HR manager and I work at a company. We have about 67 employees. Great.
Fred Barstein:
So during the program you talked about … You got a new financial advisor and you are very happy. And first question we have: Why did you look for a new financial advisor?
Ricka:
We were long overdue. I think it had been many years since we’d benchmarked either our plan or our advisor. So we went through the process and we included our current advisor in the interview process. We selected about three different firms and the people that would be, people thought that we thought were going to be on the committee, we had all of them sit and each company presented to us, to the presentation.
Fred Barstein:
So you weren’t necessarily unhappy, but you just said, “Hey, we should go out.”
Ricka:
It was time.
Fred Barstein:
And so how did you go through that process? How’d you find the advisors? Who helped you with that?
Ricka:
So we had recently a new HR person join our team, and it was someone that she previously worked with and spoke very highly of them, and then our current financial advisor. And then we had one more that was recommended by our donors.
Fred Barstein:
And you did the process yourself?
Ricka:
We did.
Fred Barstein:
Yeah. And then I know you said you were happy. What’s been the benefit of having a new advisor?
Ricka:
I think the education and their engagement in the process. They took time to meet with us, explain who they were, what they did. And then they educated us on what it meant to be a fiduciary. So they spent a lot of time with that and then they benchmarked our plan for us. They provided a thorough presentation, recommendations. So it’s good.
Fred Barstein:
Sounds like you got a good advisor. Very good. Well, congratulations on that. Final question: TPSU, I know you’ve been to a few. What were a couple of things you learned today that you took away?
Ricka:
Oh, it was great. I definitely have three different things that I want to bring back to our committee and our plans. One is about the auto-escalation around raise time, which sounds fantastic. Another would be the emergency savings plan and reducing the amount of loan options that we have on our plan. It was great information. Thoroughly enjoyed myself. All the presenters were very knowledgeable. It’s awesome.
Fred Barstein:
Great.
Ricka:
It was good too.
Fred Barstein:
Well, thank you. Thanks for your time today. And thank you for watching four 401K TV. Stay tuned.
