Who Represents Whom?
Who represents Whom? That is the question!
We have found, through a number of conversations, that employers are not always clear on their salesmen, or 401k provider’s offerings.
There was a deluge of articles last month: on Tussey vs ABB; The NY Times “Lone Ranger of the 401k’s”; Carol Bruckman’s insight on bundle providers.
WFC, Fidelity, MFS, Vanguard and others have shown us: employers do not understand who represents them, and they need a better understanding.
Granite Group gets it. How could an employer decipher among all the offerings? The mutual funds, banks, brokerages and insurance say they do a great job for you. The independent advisors/brokers, say the are independent and will do a better job for you.
The banks, brokers, mutual funds, insurance and independent advisors/brokers are all conflicted because they represent themselves.
What to look for:
The most confusion comes with independent advisor/brokers. They are independent, but what does that mean? They act independent, but in reality, they represent platforms like LPL, WFC, Fidelity, Vanguard , etc.. These platforms are limited by their lack of offerings. When the independent says that all funds are available, that means the funds the platform has available. Hmmm…….
Ensure that Independent means they have access to all independent TPAs, custodians, record-keepers and mutual funds in the country. That is Independence!
Here are few key questions that an employer should consider:
1) Does the custodian have access to all funds in the market place (23,000 plus) ? (They should)
2) Are the independent advisors co-fiduciary (3(21) advisor) to the investments in the plan?
3) Are independent advisors compensated directly by the investments in the plan?
4) Can the independent advisors be a full fiduciary (3(38) advisor) to the plan or to the investments in the plan?
If they cannot answer yes to all of the above, then they represent themselves and not your plan!
Granite Group is a true independent consultant, who represents your company’s and your employee’s best interest!
Please visit the news section of our website and click on industry news to gather more industry information: www.granitegroupadvisors.com