From Financial Advisor IQ:
The ever-harsher spotlight on 401(k) plan fees may benefit advisors as more plan sponsors hire them to (let’s not mince words) cover their behinds.
Most plan sponsors don’t do enough to screen their 401(k) provider, mostly because it’s not their core competency. They want to get a plan in place and then hope that it works out for them and their employees. Here’s a thought: hire an experienced investment advisor to screen 401(k) providers. That way you will be dealing with someone who’s not trying to sell you on his 401(k) platform.
According to the company’s recently published “Plan Sponsor Attitudes Survey,” 84% of sponsors use an advisor today, up from 75% last year. But 38% are dissatisfied with their current advisor, and 10% are looking to switch. Asked why, 31% said they “need a more knowledgeable advisor,” up from 30% last year and 25% in 2010. A “knowledgeable advisor,” according to the respondents, informs plan sponsors about regulatory changes, consults on how to manage fiduciary risk, consults on plan design and helps minimize costs, among other things. (Fidelity surveyed nearly 1,000 plan sponsors online in March, in the fourth such study since 2008; plan sizes ranged from 25 to 10,000 participants, and Fidelity didn’t identify itself as the survey sponsor.)
If you are a plan sponsor and are looking for unbiased advice regarding your plan, call us for a consultation.