It's annual review time. That part of year when your 401(k) plan investment advisor visits to discuss what has happened in the markets and your plan during the prior year. As you consider the success of your annual review meeting, you may wish to evaluate the services you should be receiving from your investment adviser:
- Investment option performance review. This is the core set of services you are paying for. Quarterly performance reviews with reports you can understand are pretty standard. You don't have to meet quarterly, but it is reasonable to expect that you receive reports each quarter.
- New investment option searches. Every now and then it will be necessary to replace an investment option in your menu. Your investment adviser should provide you with alternatives and the reports necessary to help you make a replacement decision. He/she should also guide you through a sound, fiduciary compliant, decision-making process.
- Fiduciary compliance consulting - the IPS and more. Each year your investment adviser should take a look at your Investment Policy Statement (IPS) to ensure it is up-to-date. In addition, he/she should help you with 404(c) and QDIA compliance, plan document and records retention issues and vendor monitoring and oversight.
- Help with employee education and communication. Most investment advisers lead the annual employee education sessions for their clients. They also are able to review any employee communications for you that impact the retirement plan.
- Plan benchmarking assistance. Your investment advisor should be able to facilitate the production of a benchmarking report for your plan periodically - free of charge.
- Plan design consulting. It is reasonable to expect that your investment adviser be able to review with you the suitability of the plan design changes that leading edge 401(k) plans are adopting.
- Vendor management and evaluation. You are not familiar with the services/costs that your recordkeeper, trustee and custodian should be providing/charging. However, your investment adviser should be. He/she should be able to put your vendor services and fees into perspective for you.
Hopefully you will find that your investment adviser is checking all of these boxes for your plan.
Robert C. Lawton is president of Lawton Retirement Plan Consultants, LLC a Registered Investment Advisory firm helping retirement plan sponsors with their investment, fiduciary, employee education and compliance responsibilities. He can be reached at firstname.lastname@example.org.
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