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Selecting Your Retirement Plan Advisor: A Checklist

In view of the tremendous market volatility over the last several years and recent regulatory disclosure requirements, many business owners, who also serve as the “sponsor” for their company retirement plan, have recognized the importance and value of reviewing, and perhaps modifying, their current retirement plan program. In some instances, employee concerns about plan costs or possible legal review have heightened the sense of, “We need to do something about this.”

Plan sponsors tend to have two big questions about selecting a retirement plan advisor: “How do we do this?” and “Where do we start?”

For most plan sponsors, the key component will be selecting the “right” financial advisor for the plan—and that’s not always an easy task. Through the years, we’ve found that a simple, straightforward approach?such as an interview checklist?can make it much easier to quickly gather meaningful information and provide a clean process to compare candidates.

When it’s all said and done, all you really want to know about a prospective financial advisor are the following four things:

  • What specific services do you provide and who will be working with us?
  • How do you get paid?
  • What are your qualifications and experience?
  • What’s your back up plan?

The following Financial Advisor Interview Checklist helps you get the information you need in order to meet your responsibilities under ERISA (Employee Retirement Income Security Act), the law that governs retirement plans.


Exactly what services will you provide for us and who will be doing what?

Hint: Disclosure regulations require this information to be provided to you in writing before the advisor is engaged. If the candidate doesn’t provide you with such a written description, move on to the next candidate.

  • Are you a fiduciary, and do you accept fiduciary responsibility in writing? For which activities do you not serve as a fiduciary?
  • Hint: ERISA sets standards of conduct for those who manage and employee benefit plan and its assets (called fiduciaries). These parties must act in the best interest of the plan participants and beneficiaries. Regulations require written acknowledgement of fiduciary or non-fiduciary status for each service to be provided. You want the advisor to acknowledge specific fiduciary responsibility for the services he or she provides. The best situation is where the advisor acknowledges 3(38) investment manager status because this allows you to delegate the responsibility and liability for investment decisions to the financial advisor.
  • What other service providers will be working with our plan and what will they be doing (designating their respective fiduciary or non-fiduciary status)?
  • Do you provide personalized one-on-one enrollment and fiduciary investment advice services for each of our participants?
  • Do you provide Model Investment Portfolios? If so, show us a summary of their fund allocations, investment performance, expected rate of return and risk level.
  • Do you provide online and 24/7 voice response system that allows our participants to view and/or make changes to their accounts?
  • What participant communications and advice do you provide to help our employees get the most out of our retirement plan?
  • Do you prepare agendas and meeting minutes for our Plan Sponsor/Trustee meetings with the necessary support documentation to help us demonstrate that we’re meeting our plan responsibilities?  


How do you and the other service providers (such as the record keeper, custodian and third-party administrator) you bring get paid?

  • What is the estimated annual compensation for each service provider and how is it calculated?
  • Do you get paid different amounts depending upon which investments participants select?
  • Will you provide us with a written fee estimate that details this information?

What are your qualifications and experience?

  • What is your training and what professional certifications do you have? 
  • Hint: CFP® (Certified Financial Planner professional), AIF® (Accredited Investment Fiduciary®), and AIFA® (Accredited Investment Fiduciary Analyst®) are among the best.
  • How long have you been doing this and how many retirement plans do you work with?
  • What are the average range and economic situation of the participants in the retirement plans you work with?
  • Do you have any financial ethics violations?
  • Do you have Errors and Omissions Insurance? Does it cover your activities in your work with ERISA retirement plans? (Many financial advisor E&O policies exclude or are vague about ERISA retirement plan coverage.) What are the coverage limits?  Will you provide us written confirmation of your insurance coverage?
  • What are your strong and weak points?


How long do you personally plan to be in business and what is your backup plan?

  • Provide us with a brief overview of your firm and its retirement plan operations.
  • What other members of your firm will be working with us and will they be able to fully serve us if something happens to you? What are their qualifications and experience?

Finally, it’s also very important to remember that the interview process shouldn’t be one-sided. If your potential financial advisor isn’t asking you questions about what’s most important to you, what you want to accomplish with the retirement plan, what you like and don’t like about your current arrangements, how likely do you think it is that he or she will successfully be able to meet your objectives?

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Comment   |  7 years, 9 months ago from Rocklin, CA