The most important decision that a 401(k) or 403(b) plan sponsor makes is hiring the right advisor. As advisors go, there are more dabblers pretending to know, than professionals. While retirement plan sponsors are waking up to the importance of choosing the right retirement plan, they are starting to question whether they have the right advisor.
Though there are many questions plans can ask about an RPA’s experience, training, qualifications and services, there is one question to ask to determine if they are really acting in your best interest, which is:
Should I hire an independent 3rd party to conduct due diligence on you?
If they answer no, it’s time to switch.
Most highly qualified RPAs recommend an independent benchmarking or request for proposal because they have nothing to hide, including their fees, and an understanding that ERISA fiduciaries have a fiduciary obligation to conduct due diligence on all vendors paid out of plan assets.
How can an RPA recommend that a plan use an independent consultant (like them) to conduct due diligence on investments and record keeping periodically going to market with a full RFP … but not include themselves? Tell your advisor that your record keeper is willing to conduct due diligence on themselves and they will scoff in disdain.
TPSU now offers a full suite of RPA due diligence tools including a benchmark, RFI and full RFP through the rpaDD Center. There are many good regional professionals that also offer this service. But if an RPA is hired to conduct due diligence, they may not select themselves.
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