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Navigating the complexities of corporate retirement plans… Don't try it Alone!

The Role of a Knowledgeable Independent Retirement Plan Investment Advisor For Your Corporate Plan.

As the employer & plan sponsor of a company retirement plan, you have many responsibilities and important decisions to make. You want a plan that helps employees save for retirement, attracts and retains qualified employees for your company and meets all fiduciary and regulatory requirements. You do not have to do this alone and probably shouldn’t.  With a knowledgeable independent retirement plan investment advisor as your trusted partner, you have someone who can help you establish an action plan to support your goals and ultimately help you and your employees build a better retirement future.

As a plan sponsor and the fiduciary of your plan, you have ultimate responsibility for all decisions you make including plan design, investment selections offered, employee education and compliance. However, the services of an experienced financial professional can help you navigate each step, plan level, investments and participant engagement.

Plan-Level Responsibilities

As the fiduciary of your plan, some of your most important responsibilities include establishing an appropriate plan structure for your participants. This includes determining what features and investments your plan offers as well as selecting and monitoring service providers. An experienced independent retirement plan investment advisor will have the knowledge to help you understand these responsibilities and can help you avoid mistakes that could expose you to liability.

Retirement plans are inherently complex and have become more so in recent years. A experienced advisor can help keep you up-to-date on changing legislation, review investment options and plan structure to help participants reach their financial goals for retirement.

A knowledgeable independent retirement plan investment advisor can help you determine if your plan provider offers the features and options that are best-suited for you and your participants. They can also help you make informed decisions on plan features that have long-term implications, such as using all of a provider’s services (a bundled plan) or employing a third-party administrator (an unbundled plan).  They should serve as your quarterback to help resolve concerns, get answers to your questions and conduct ongoing monitoring of your service providers to determine if they are performing their duties in an efficient and cost-effective manner.

Investment Option Decisions

Unless you are an experience investment advisor, one of the most challenging decisions you face is the design of the investment menu, including the selection and monitoring of the options you offer to participants. A knowledgeable independent retirement plan investment advisor is equipped to keep you updated on changing investment types, investment best practices, performance measures and other items that may impact the options you offer to your participants. They also have access to tools to present the analysis necessary for you to make educated and informed decisions.

An independent retirement plan investment advisor can help you establish a rational menu, which may include selected asset classes, sectors and diversified portfolios, such as target-date funds, that simplify employee decision-making and can serve as default investments. They can also help you apply best practices when creating, monitoring and updating your Investment Policy Statement (IPS) so investment decisions align with overall plan objectives. 

An Investment Policy Statement (IPS) is the crux of your investment process to maintain a prudent process and outline how to select and monitor investment options. It also describes the plan’s investment goals and the frequency investment options will be monitored and what circumstances require them to be replaced.   As a fiduciary you are required to periodically review the investment options to determine performance relative to your IPS guidelines.

Engaging Plan Participants

Helping employees understand and make informed decisions about their participation in your retirement plan is not only a fiduciary responsibility, but it is critical in helping them reach their retirement goals. Publicize the plan, making sure participants understand their options and develop strategies that maximize participation are just some of the things a knowledgeable independent retirement plan investment advisor does to assist you. They can provide information to employees to engage them in the plan and answer their investment questions. Enrollment and update meetings along with regular communications help participants make decisions on how much to contribute or increase contributions and which investment options are best for their particular situation. 

A knowledgeable independent retirement plan investment advisor can help you manage this process and determine the right strategy for your plan.

The Right Independent Retirement Plan Investment Advisor for You

The right retirement plan investment advisor provides a range of essential plan services. It is important to determine if and how they can meet your needs and requirements. Three key areas to evaluate are:

1. Retirement plan knowledge, experience & references

2. Quality of services and resources

3. Fees, service and value

It is important that your advisor be experienced in the complexities of retirement regulations, knowledgeable about best practices in investments, employee education and be an advocate for your plan.

An independent retirement plan investment advisor is crucial to providing your company with the guidance, tools and resources that allow the company and its employees the opportunity to reach their retirement goals.  They bring experience, knowledge and resources to help solve problems along with the opportunity to improve plan compliance, increase participant motivation and help you make more informed decisions about the investment menu you offer.


Disclosure: The posted information is for informational purposes only. This message does not constitute an offer to sell or a solicitation of an offer to buy any security. All opinions and estimates constitute Karp Capital's judgment as of the date of the report and are subject to change without notice. Accordingly, no representation or warranty, expressed or otherwise, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or timeliness of the information contained herein. Securities offered through Infinity Financial Services (a registered broker-dealer, member FINRA, SIPC). Infinity Financial Services and Karp Capital Management are not affiliated companies.

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Comment   |  7 years ago from San Francisco, CA