Proactive 401(k) Management: How RPA Due Diligence Can Save Costs & Boost Engagement
During a recent conversation on 401kTV, Fred Barstein interviewed Kristina, a controller responsible for HR and 401(k) oversight, who shared an enlightening story about her company’s retirement plan advisor. Upon reviewing their 401(k) setup, Kristina discovered that her company had been paying a 1% fee to an advisor they had never interacted with, nor had they received any tangible benefits from. This eye-opening moment led her to seek out a more proactive, independent advisor who was able to reduce the fee and provide far more valuable services, such as financial education, investment benchmarking, and personalized guidance for employees.
This experience underscores the importance of conducting regular due diligence when it comes to choosing and working with a retirement plan advisor (RPA). The situation Kristina found herself in—paying high fees for minimal services—is unfortunately not uncommon. By staying vigilant and reassessing their retirement plan management, Kristina’s company not only saved money but also saw a significant improvement in employee engagement and financial wellness. Employees were able to receive one-on-one guidance from the new advisor, helping them set clear financial goals and make more informed decisions about their retirement savings.
Kristina’s story highlights a broader issue many organizations face: a lack of awareness about the quality of their RPA services and the importance of due diligence in ensuring their employees are receiving the best possible financial guidance. This is where the services offered by The Plan Sponsor University (TPSU) become invaluable. To support plan sponsors, TPSU offers a comprehensive suite with RPA Due Diligence, providing tools through the rpaDD Center, including benchmarking, RFI, and full RFP services. The Plan Sponsor University (TPSU), which has educated over 10,000 plan sponsors through half day live training programs and online curriculum since 2013, is an independent trusted source not affiliated with any provider or advisory firm. The Retirement Advisor University (TRAU), our affiliate organization, has trained over 2,000 RPAs. To find out more about rpaDD, visit: https://www.tpsuniversity.com/rpadd-center/.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, founder and CEO of TPSU. Just completed a program here at USC and I am here with Kristina. Welcome Kristina.
Kristina:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
Kristina:
Yes.
Fred Barstein:
Okay. Before we do, tell our audience a little bit about yourself.
Kristina:
I’m Kristina. I’m a controller and I’m in charge of not only accounting, but HR and 401k.
Fred Barstein:
How many employees in your org?
Kristina:
30 to 35 at any given time.
Fred Barstein:
Very good. So you told us a good story, interesting story about your advisor. Can you tell everyone about that?
Kristina:
I took on the 401k about two years ago and I was speaking to the plan. I was speaking to the whoever, but I didn’t realize we even had a financial advisor involved in this until I actually had some outside sources come in and try to sell me the product.
Fred Barstein:
Other advisors?
Kristina:
Other advisors.
Fred Barstein:
Right.
Kristina:
And once I started pulling the reports and having them help me read the reports, I realized I was paying 1% at one point to this advisor who I had never even heard of. So obviously, I was getting nothing for my one point and he was able to undercut that one point to come in as an independent advisor and advise on the plan.
Fred Barstein:
Right. And how have they helped you?
Kristina:
They have helped us by looking at our investments to make sure we are benchmarked at market. They have provided education and training. Anytime there are any bonuses paid out, they come in and talk about possible structuring of bonuses. So basically they provided a wellness plan.
Fred Barstein:
And you said they actually meet one-on-one with your employees and you meet with them as well?
Kristina:
Yes, they do come in or virtually meet one-on-one if anybody has questions and they’ll guide them towards their goals financially.
Fred Barstein:
So you’re paying less and they’re actually doing more.
Kristina:
Much more.
Fred Barstein:
That’s a great deal. So all of you think about that. Final question. I know you’ve been to TPSU before. Maybe a couple things you picked up here and would you recommend it?
Kristina:
I think I’ve learned to stay on top of everything. The benchmarking is important to make sure we’re where we are supposed to be and the ideal plan. That’s something I think everybody should know and absolutely I think anyone who has a 401K, a 403(b) should take this.
Fred Barstein:
Great. Well thank you for coming, Kristina.
Kristina:
Thank you.
Fred Barstein:
And thank you for watching 401KTV.
