Breaking Up (with your retirement plan advisor) is Hard to Do

Updated: Jul 13, 2020

Why do we stay in bad relationships? Whether it’s your spouse, a friend, an old car, or your financial advisor, we hold on to the familiar. And the same is true for plan sponsors. They might recognize that their retirement plan advisor is a great wealth manager and that person might even be their personal consultant; so it’s convenient. But, they might be embarrassed to ask the hard ball questions because they’ve had a great relationship for years.

However, it’s now time.

In the recent 2015 Fidelity Plan Sponsor Attitudes survey, it was found that 3 out of 10 plan sponsors are not satisfied with their advisor.[1] Almost 4 out of 10 do not feel like they are receiving good value from their 401(k) advisor.[2]

The study also showed that 17% of plan sponsors are shopping for a new advisor and the 1# reason is that they want a more knowledgeable advisor.[3] So, what does it mean to be “more knowledgeable?”

It is defined as the ability to:

  1. Offer proactive suggestions for improving plan performance

  2. Proactively consult on plan design

  3. Consult on how to best manage fiduciary responsibilities

  4. Help select and monitor investment options

  5. Help minimize costs

  6. Advise of on regulatory changes.[4]

Can you do all this? If you’re shaking your head, yes, then you’re in high demand! One might say “Swipe Right” on Tinder.

In the same survey, 6 out of 10 plan sponsors said that it is very important for their advisor to take on formal fiduciaries duties.[5] Additionally, as plan sponsors are more aware of them, it’s important that everyone be on the page. Today, 6 out of 10 plan sponsors are very certain that they understand their own fiduciaries responsibilities. Thus, plan sponsors are seeking experienced advisors so they can impact plan outcomes.

Additionally, retirement plan experts genuinely influence and improve plan results. For example:

  • 70% of plan sponsors working with “Professional Retirement Plan Advisors, observe that 50% or more of their participants are on track to achieve a successful retirement.”[6]

  • 83% of clients have seen average employee deferral rates improve over the last two years[7]

  • Nearly 75% of plans that partner with a Professional Retirement Plan Advisor have experienced participant deferral increases of 4% or more and 1/3 of plan sponsors reported an increase of 6% or more![8]

Even though breaking up is hard to do, reducing plan sponsor risks and increasing participant outcomes are two major reasons to have “the talk.” Therefore, it’s time to speak with plan sponsors about why they should break up with their existing advisors and the genuine benefits of working with a retirement plan expert!

Thanks for reading and Happy Marketing!

About 401(k) Marketing

We believe the retirement plan industry can do better. Our clients are the best professional retirement plan advisors and TPAs in the business. They care deeply about saving America’s retirement future. We are proud to share their voices through industry writings, professionally-designed marketing materials (including websites), and expert content collateral. We lend support by promoting businesses through ongoing awareness campaigns.

About Retirement Plan Marketing

Retirement Plan Marketing is a product of 401(k) Marketing and is an ongoing turnkey marketing solution for retirement plan advisors. It is an easy-to-follow, consistent marketing program designed to get you noticed in your community and generate new retirement plan sales. When you deliver relevant plan sponsor content, you add value to your conversations and can work your way up to become known as the “go-to” retirement plan advisory office.

[1] Fidelity. Plan Sponsor Attitudes 2015, Sixth Edition.

[2] Fidelity. Plan Sponsor Attitudes 2015, Sixth Edition.

[3] Fidelity. Plan Sponsor Attitudes 2015, Sixth Edition.

[4] Fidelity. Plan Sponsor Attitudes 2015, Sixth Edition.

[5] Fidelity. Plan Sponsor Attitudes 2015, Sixth Edition.

[6] EACH Enterprise, LLC. The Value of a Professional Retirement Plan Advisor. 2014.

[7] EACH Enterprise, LLC. The Value of a Professional Retirement Plan Advisor. 2014.

[8] EACH Enterprise, LLC. The Value of a Professional Retirement Plan Advisor. 2014.

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401(k) Marketing, LLC is not in the business of providing legal advice with respect to ERISA or any other applicable law. The materials and information do not constitute, and should not be relied upon as, legal advice. The materials are general in nature and intended for informational purposes only. All content, including any brochures or other materials designed for potential use with plan sponsors, fiduciaries, and plan participants, must be reviewed and approved by the compliance and legal department(s) of the Financial Professional and/or Third Party Administrators firm prior to any use to confirm that they meet the firm’s legal and compliance policies and standards. The Financial Professional, Third Party Administrator,  and his/her firm are solely responsible for the use of content and any materials included herein, and for ensuring that all services provided by the Financial Professional and Third Party Administrators conform to the firm’s legal and compliance policies and standards.