DC Plan Investment Council Launches Study to Research the Benefits of Doing Business with Professional Retirement Plan Advisors

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Focus group discussions show how 401(k) plan sponsors benefit of doing business with a Professional Retirement Plan Advisor, the DC Plan Investment Council follows-up with a quantitative study to further research.

It is encouraging to hear how delighted plan sponsors who use the services of a Professional Retirement Plan Advisor are with their advisor, and the many ways in which they benefit.

The DC Plan Investment Council launched a comprehensive study to research the benefits retirement plan sponsors gain from doing business with Professional Retirement Plan Advisors. This multi-phase study will span over six months. In a first step, the Council conducted focus groups in Raleigh, North Carolina with plan sponsors who currently use the services of a Professional Retirement Plan Advisor. To avoid bias, respondents were selected at random from among plan sponsors who do business with advisors not involved in the Council.

Early findings are eloquent. In focus group discussions, one plan sponsor declared: “In my opinion, a firm like this is a necessity if you have a 401(k) plan, anybody who has been given the fiduciary responsibility. I would refuse to serve on a committee that didn’t have that type of professional oversight.“ From the discussions, it is clear that many plan sponsors find comfort in the services their advisor delivers: “Our company feels a whole lot more comfortable with this relationship. As I said, we are not the experts at all. So, I just need someone to keep the administrator honest so we’re very comfortable.” says another plan sponsor.

Moving beyond focus groups, the study will survey 400 plan sponsors with $5 million to $500 million in plan assets to compare outcomes for plan sponsors who rely on a Professional Retirement Plan Advisor with a benchmark for other plans that do not utilize the services of an advisor at all or that prefer to do business with an advisor or consultant who does not specialize in retirement plans. The survey questionnaire will address a myriad of questions to identify areas where Professional Retirement Advisors do an outstanding job and other areas where they could stand to improve. It will be interesting to study whom various groups of plan sponsors contact first and as a second resort in the case of serious problems.

Five firms already support the DC Plan Investment Council commissioned this research. This research will allow them to better serve the community of Professional Retirement Plan Advisors just as a new wave of fee disclosures to participants and plan sponsors mandated by the Department of Labor hit the street. The Council is very pleased with the initiative Diversified, Franklin Templeton, John Hancock Funds, MFS Investment Management, and MassMutual Retirement Services have taken to collaborate on this landmark study.

Formed in May 2009, the Council includes Professional Retirement Plan Advisors, Practice leaders, Service Providers and Investment Management firms.    “It is encouraging to hear how delighted plan sponsors who use the services of a Professional Retirement Plan Advisor are with their advisor, and the many ways in which they benefit. ” says Jim Robison of White Oak Advisors who has been involved with the Council since its creation in May 2009. Gregg Andonian of Baystate Fiduciary Advisors, Inc adds: “When survey results come out later this year, we will be very interested to contrast outcomes for clients of Professional Advisors with a norm for plan sponsors who do not currently use the services of a specialized firm like ours.”

About the DC Plan Investment Council
The Council advocates for successful qualified plan and participant retirement outcomes through the collaborative efforts of experienced, qualified retirement plan advisors, investment firms and asset managers, and defined contribution plan service providers. The Council accomplishes this mission by its focus on:

  • Identification of duties, responsibilities and attributes of the professional retirement plan advisor.
  • Sharing our professional standards with plan sponsors who are responsible for the success of their plans.
  • Providing collective thought capital to decision makers, product providers, legislators and the public.
  • Giving voice to the retirement plan advisor community.
  • Tools to evaluate advisors, ensuring the quality of services needed for successful retirement outcomes.

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Eric Henon

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