SURVEY SAYS: Do You Benchmark Your Retirement Plan Adviser?

Last week, I asked NewsDash readers, “Do you benchmark your plan adviser?”

Of those responding, 43% said they do so every two to three years, and 29% said they do so every four to five years. Fourteen percent indicated they never have, and others said they haven’t yet because their advisers are newly-hired.  


An odious process…but necessary.  

Regardless of the asset size of the plan, having an outside advisor is really important, especially now with the fee disclosure requirements. When the new advisor started, he re-negotiated the fees with our adminstrator and it was the largest fee reduction in his career! Participants had been paying commercial fees v. institutional fees for years.  

It kind of hard to benchmark our advisors on fund performance when we subscribe to the index mentality. Luckily our company has a philosophy that 401(k) investors have enough risk to accumulating sufficient retirement assets from 1) the market and 2) fund expenses (low cost index), that all other plan expenses are paid for by the company. Therefore advisor expenses are not adversely affecting plan participants.  

We benchmark fees compared with similar advisers who service plans our size. We request bids in the form of a flat fee, rather than basis points.