Is Your Retirement Plan Advisor Helping Your Employees Reach Their Goals?

A vast majority of Americans rely on their employer’s retirement plan and Social Security for their retirement income needs. However, more than half of U.S. workers have less than $50,000 saved for retirement, and nearly a third have saved nothing! As life expectancy increases and healthcare costs continue to rise, employees need more help than ever in planning for retirement. 

As an employer and plan sponsor, you might think, “I provide my employees with a solid retirement plan; if they choose to engage with it, that’s their decision.” However, research indicates that employees who are not adequately prepared for retirement can lead to significant costs for employers, including increased turnover and lower employee morale. Additionally, when employees experience financial stress, it can impact their productivity and overall well-being, ultimately affecting your organization’s bottom line. 

Helping employees reach their retirement goals is no longer just a checkbox benefit; it’s a strategic imperative. Having the right retirement plan for your employees matters, and this starts with hiring the right plan advisor. 

The right advisor will sit on your side of the table and serve solely in the best interests of your plan and your employees. They will offer conflict-free advice and ensure that the fees on your plan are reasonable, so more money stays in the plan for when your employees retire. Below are some tips on how to go about partnering with the right advisor for your plan.  

10 Tips for Selecting the Right Retirement Plan Advisor 

Tip 1: Ensure your plan advisor is contractually obligated to make decisions that “are in the best interests of” (the fiduciary standard), rather than merely “suitable for” your employees. This ensures a higher level of accountability and integrity in the advisor’s recommendations. 

Tip 2: Look for an advisor who is willing to be a named fiduciary at both the plan and employee levels. This adds an additional layer of protection for your employees’ retirement savings. 

Tip 3: Eliminate revenue sharing from your retirement plan. Understand exactly how your advisor is compensated, as hidden fees can significantly erode retirement savings over time. 

Tip 4: Verify that your plan advisor has the proper certifications, such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA). These credentials reflect a commitment to high ethical and professional standards. 

Tip 5: Choose an advisor who is conflict-free and does not sell financial products. This ensures that their recommendations are genuinely in the best interest of your employees. 

Tip 6: Require your plan advisor to meet with your employees regularly. They should educate them on the benefits of the retirement plan, the investment options available, and provide ongoing guidance throughout the year. 

Tip 7: Ensure your plan advisor offers objective financial education covering budgeting, navigating Social Security benefits, managing debt, and planning for children’s college expenses. This holistic approach supports overall financial wellness. 

Tip 8: Ask your advisor to provide financial planning tools for your employees. Ongoing education and support will help ensure employees stay on track to reach their retirement goals. 

Tip 9: Understand your plan advisor’s investment philosophy. Request to see the investment options available in their own company’s retirement plan, as well as those they offer to other clients. A reputable advisor practices what they preach. 

Tip 10: Confirm that your plan advisor is independent of the recordkeepers for your plan and the fund companies they recommend. Independence enhances objectivity and ensures the best possible outcomes for your employees. 

Selecting the right retirement plan advisor can significantly impact your employees’ retirement readiness and financial well-being. Are you looking for advice specific in relation to your situation? Reach out to our team of retirement plan advisors. We’re here to help you make the best choices for your employees’ future.

The information contained in this document is provided for informational purposes only and should not be construed as individualized advice. For individualized advice, please consult with your adviser.