4 Questions for Your 401(k) Advisor - Fiduciary First Answers Your Top Questions

MAITLAND, Fla., Nov. 13, 2018 /PRNewswire-PRWeb/ -- As a plan sponsor, you've probably got your hands full running your company, but you know that offering a top-notch 401(k) is critical to attracting and maintaining top talent and important for your employees' financial future. So it's vital that you make the best choice you can when picking an advisor. Here are four key questions to ask potential 401(k) plan advisors when you're faced with this important decision.

1. How will you educate workers and promote plan participation?

You need a 401(k) plan advisor who offers retirement planning education in a number of formats including: group presentations, one-on-one consultation, online content (blogs, e-newsletters), and print. Because individuals have different approaches to learning, it's important to have personalized outreach approaches so all employees can access information in a way that works best for them.

2. How do you handle down markets?

Your 401(k) plan advisor should be able to provide clear guidance regarding risk management in volatile market conditions. Using scoring systems with clear-cut benchmarks to evaluate funds can be useful. It's critical that funds be rescored on a regular bases to ensure they remain prudent choices for your organization. Ask how frequently your advisor will meet with you to review the performance of your fund portfolio.

3. Do you have flexible strategies to encourage retirement plan participation for younger and older employees?

Make certain your 401(k) plan advisor is able to customize their approach to helping your workers, whether they're Millennials or Gen Xers or Boomers. Each age group has its own specific needs and concerns. A capable plan advisor will personalize information and their approach accordingly. It's important, whether an employee is trying to start a family, send his or her kids to college or is facing potentially costly health issues, that retirement planning takes these factors into account.

4. Can you serve as both 3(38) and 3(21) fiduciary for my organization?

This is a critical question to ask a potential plan advisor, particularly if you are interested in the highest level of service and the greatest level of protection for your company. A 3(21) fiduciary can advise and make recommendations, though the employer remains ultimately responsible for all investment decisions and legal operation of the plan. However, by retaining a 3(38) fiduciary, you have access to a higher level of protection because this type of fiduciary is responsible for making investment choices and the management of the plan. You may want to look into a 3(38) fiduciary if you are a smaller firm with more limited HR resources.

"Finding the right sponsor is no easy task. Asking good questions is an important step toward finding one who will make your organization and your employees' best interests their top priority," says Jamie Ann Hayes, Partner and Consultant at Fiduciary First.

SOURCE Fiduciary First