Value of a Retirement Plan Advisor

Top 5 Reasons to Have a Financial Advisor on Your Retirement Plan Team

Some business owners fear they don’t have the time or expertise to manage a 401(k) plan for their employees. From decoding key ERISA regulations to keeping abreast of fees and providing educational support to workers, there are many responsibilities that sponsors bear. Partnering with a financial advisor can make a significant difference in managing and optimizing your retirement plans with more ease.

Here are the top 5 reasons why it’s good to have one on your team:

  1. Plan Design Support: There isn’t (or shouldn’t be) a one-size-fits-all approach to plan design. Factors such as business size, participant needs, and employee pay levels can all affect what kind of plan might be optimal for you. Financial advisors bring specialized knowledge to help you design and maintain a comprehensive retirement plan that meets regulatory standards and aligns with your company’s goals.
  2. Employee Education: One of the key steps to promote positive plan outcomes is by encouraging employee participation. Seminars, one-on-one consultations, and educational content can help employees feel motivated to contribute and empowered to save for retirement. This also can help your plan avoid becoming top-heavy and assist with passing required nondiscrimination testing.
  3. Fiduciary Responsibility: The plan sponsor is ultimately responsible for ensuring that fiduciaries are properly appointed and monitored. Which type of fiduciary you choose to work with will depend on your needs, but either way, hiring an advisor can help you ensure investments perform well enough to merit continued inclusion in the fund lineup. Advisors act in the best interest of your employees, ensuring their retirement plans are managed with integrity and transparency.
  4. Cost Efficiency: Excessive fee litigation is becoming more commonplace, and it can be costly. By negotiating fees and selecting and monitoring cost-effective investment options, advisors can help reduce the overall cost of your retirement plan.
  5. Ongoing Compliance Support: Sponsors who run their own plans have their work cut out for them to maintain compliance. Constant market and regulatory changes could affect plan design and investment lineup decisions. Plan Advisors can help ease administrative burdens by working with your other service providers and retirement plan committee and help you stay abreast of any developments that may affect your organization.

Whether it’s helping to attract and retain top talent or providing valuable tax advantages, a robust retirement offering is a major asset to an organization. To take advantage of these benefits, but still have time to run day-to-day operations, sponsors can avail themselves of an invaluable resource — a retirement plan advisor. Those who hire advisors have a built-in support system that can help enhance the value of your retirement plan, benefiting both you and your employees.