The Difference an Adviser Can Make

retirement presentation
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The qualified retirement plan industry has been taken over by salespeople. This must stop if we want our employees to successfully retire. Your employees look to you for guidance, like it or not it is your resonsibility to guide them to a successful retirement. Your company retirement plan should be treated like a pension fund like plan not a lead generation tool for financial salespeople.

Partnering with a professional retirement plan adviser offers benefits for plan sponsors, according to a study for the Retirement Advisor Council.  —

However, only 25% of 401(k) and 403(b) plan sponsors, with 100 or more employees and plan assets between $5 million and $500 million, partner with a professional retirement plan adviser. Most of the others do business with a generalist adviser; some do not use an adviser or consultant at all. Laura White, vice president at Diversified, a partner in the research, told PLANADVISER, historically, advisers other than professional retirement plan advisers have held a larger share of the not-for-profit market, but Diversified expects the gap will close with time.

Half of respondents who use a professional retirement plan adviser say it is a necessity to retain the advisers’ services for their plans. Forty-four percent say retaining the services is very beneficial to their plans. In addition, 16% of respondents with no adviser said retaining one is a necessity and 59% said retaining a professional retirement plan adviser would be very beneficial.

Overall, 46% of plan sponsors have measured the retirement readiness of their participant population more than once. Clients of professionals are unique in that 75% monitor year-over-year changes and 31% say more than 70% of their participants are on-track to achieve a successful retirement. These superior outcomes may be the result of plan designs that encourage saving. Another contributing factor could be new ideas that clients of professionals adopt more readily than other plan sponsors.

More than any other category of plan sponsors, clients of professionals rely on a retirement plan committee that meets regularly to make plan decisions. White said 74% with a professional retirement plan adviser state a committee who meets at regular intervals makes decisions regarding the design of the plan or array of investment options. In addition, 70% complete an investment review at least twice a year; 40% twice a quarter.

Only 41% of those with another adviser type complete a periodic review of investment options with their adviser as compared to 79% with a professional retirement plan adviser; 73% of those with a professional retirement plan adviser state it’s absolutely critical to review investment options periodically, White said.

A professional retirement plan adviser dedicated to your company plan will lead to improved results and less burden on your staff. Many advisers use the 401(k) plan as a lead generation tool to sell ‘product’ to your employees. This concept can lead to disgruntled employees if the products don’t work out.

Please comment or call to discuss how this can affect you and your company.

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