Though most advisor RFPs are conducted by larger defined contribution (DC) plans like 401ks or 403bs with more than $10 million, the benefits are substantial for smaller companies as detailed by the Director of Administration at the Business Roundtable (BRT) [View PDF Document (opens separate window)] which recently completed a DC plan advisor RFP using InHub.
Not satisfied with their current advisors and wanting to hire a co-fiduciary, BRT decided to conduct a formal RFP process to find a new advisor. On a recommendation from their record keeper, the Committee used InHub, an online advisor RFP service, to streamline the process as many of the decision makers travel frequently and did not have time to meet often in person.
In an interview conducted by InHub, BRT reviews the major benefits of using a 3rd party online service to search for a new 401k advisor which include:
- Elimination of paper RFP responses
- Turnkey process with structure
- Domain expertise by InHub to guide them acting as the impartial partner
- Time saving
In fact, the Director of Administration could not imagine how companies are still using paper RFPs for their advisor search.
Though dissatisfaction with a DC plan advisor is a good reason to start an RFP process, many plan sponsors like Dot Foods see the benefit of the process even when they are happy with their plan advisor as they conduct RFPs for all parts of their business to make sure they are getting a good deal. In addition, the law requires that DC plan sponsors make sure that fees paid to providers like advisors are reasonable through a prudent and documented process.
401kTV has partnered with InHub to provide DC plan sponsors with this online RFP service – we are also recruiting training industry professionals like TPAs, CPAs, attorneys and consultants to become Advisor RFP Consultants (ARCs) for those companies that want a local professional to help them through the process. Through InHub’s technology and local professionals trained and overseen by 401kTV affiliate TRAU (The Retirement Advisor University), a collaboration with UCLA Anderson Exec Ed, it’s never been easier to conduct an advisor RFP. And, with the new DOL rule expanding the definition of fiduciary for advisors effective April 10, 2017, a documented prudent process is becoming even more important.