No-Advisor 401(k) Programs
I know there are employers that believe Advisors can’t add any value to their company 401(k) plan. The no-Advisor 401(k) programs provide them everything they need, except an Advisor, at the lowest cost possible. A chase to the bottom. Employers and employees will never physically have anyone working with them to maximize this very important employee benefit program. The no-Advisor providers boast about being the best 401(k) program for “small employers”. Employers with fewer than 100 employees rely on local professionals to assist them to run their business, including CPAs, Attorneys, Bankers, Group Benefit Agents and suppliers to name a few. And the employer can look in their eyes when speaking with them, possibly the same person over the long term.
I believe disgruntled employers have never worked with an effective Advisor to serve their 401(k) plan. Effective Advisors are the one’s when asked, what’s your favorite part of serving 401(k) plans answer, “Working with employers and their employees to accomplish their goals.” I believe effective Advisors can enhance the probability of a company’s profitability by working with employees to use the 401(k) plan to confidently prepare for their retirement. The retirement readiness of employees promotes the long term viability of a company by facilitating the replacement of their workforce with younger, better skilled and less expensive employees.
All 40(k) plans should have an effective Advisor working with the employer and employees. A Chief Retirement Officer to assist the employer to define plan goals, activities to accomplish those goals, monitoring outcomes and reporting back for next steps. And a retirement coach for the employees who will work with them to confidently use the 401(k) to be ready to retire when they choose.
February 19th, 2018