Skip to main content

Using an Independent Investment Advisor for Corporate Retirement Plans

Best practices underscore the value of using an independent advisor with regard to developing, implementing, and overseeing a retirement plan. An experienced, independent advisor can offer valuable guidance and feedback to help ensure that a retirement plan is meeting the objectives of both the plan sponsor and participants. A plan fiduciary who lacks the expertise necessary to fulfill their fiduciary obligations must seek the advice of an expert. An independent advisor dedicated to retirement plans offers a broad range of services to assist a plan fiduciary.

According to our 2014 Retirement Survey Report, Seventy-three percent of survey participants said
they use an independent advisor for at least one of their retirement plans; nearly 25% indicated they do not use an independent advisor.

Consistency was evident when respondents were asked to identify those services provided by their retirement plan advisors. Ninety-one percent of those responding said their advisor offered investment review and analysis. Eighty-three percent said their advisor consulted on plan design, and 78% said their advisor offered employee education.

Those responses are consistent with accepted best practices. Among other services, retirement plan advisors should offer:
  • assistance in the development of an investment policy statement;
  • help in selecting a plan provider;
  • guidance with regard to plan design, including identifying significant plan objectives—this can encompass issues such as eligibility, vesting, matching provisions, and availability of loan programs;
  • help in selecting investment options offered to plan participants, including a specific investment “menu” structure;
  • plan monitoring and regular review; and
  • participant engagement and education.

An advisor can play a critical role in helping employees understand the importance of retirement planning as well as the investment options offered to them. Comprehensive education is critical in securing maximum employee plan participation and understanding.

One troubling observation: nearly 80% of survey participants said they were unsure of their independent advisor’s fiduciary status in connection with the organization’s primary retirement plan. As independent advisors’ fiduciary status relates to the selection and monitoring of plan investments, best practices suggest it is prudent that an independent advisor be willing to affirm their fiduciary status in writing. This not only clearly acknowledges fiduciary status but also clarifies the specific nature of that responsibility to all involved.

Should you have questions about the 2014 Retirement Survey Report, or for information on how HANYS Benefit Services can enhance your organization's retirement offering, please contact us by calling (800) 388-1963 or email us at hbs@hanys.org.

Popular posts from this blog

SECURE 2.0 Discussion Series: Session Two

The retirement industry has been buzzing since the SECURE 2.0 Act was signed into law last December. This new, comprehensive legislation has sparked a lot of discussion. As with any major reform, it will take time for the industry to fully adapt and understand all its implications. Following our April 11 webinar on the first three months of the industry’s response, our team reconvened to discuss some of what we have heard from our client and vendor partners and to respond to some of the great questions we heard from attendees. Panel participants included the following HBS team members: Noah Buck, Christina Bauer-Dobias, Sean Bayne, Vincent Bocchinfuso and Kathleen Coonan. The Discussion SB – Throughout the webinar, I wanted to stress two things: 1) confusion about where to start and what is expected from plan sponsors is normal; and 2) even more than three months in, this is a developing situation and people should expect changes as time goes on. With those in mind, engagement through

SECURE 2.0 Discussion Series: Session One

SECURE 2.0 provisions: What we know and what’s still up in the air The SECURE 2.0 Act, signed into law in late December 2022, has factored heavily in retirement industry discourse since the final legislation was published. As with any legislation of this depth and breadth, there’s a lot to digest and the industry takes time to adjust. Our team of experienced advisors recently met to discuss some of the more nuanced provisions of the legislation, such as changes to Roth contributions, and what they could mean for plan sponsors. Panel participants included the following HBS team members: Noah Buck, Christina Bauer-Dobias, Sean Bayne, Vincent Bocchinfuso and Kathleen Coonan. Highlights of our panel’s conversation below should serve to help guide plan sponsor thinking. On Roth employer contributions NB – In addition to deferring pre-tax or Roth, plan sponsors can now allow employer contributions to be classified as Roth, is that right? VB – Correct. This is immediately available to plan s

What you should know about biosimilars

Rapidly increasing healthcare costs will likely continue to impact employers for the foreseeable future. As a result, many employers are considering strategies to manage these costs, including rising prescription drug costs. The introduction of biosimilar drugs as an alternative to biologics may bring value to healthcare by offering cost savings and increasing employee access to necessary medications. While biosimilars can potentially combat rising prescription drug costs, employers will need to learn more about them before considering how their health plans can accommodate these newer drugs. This article explores biosimilar drugs and ways employers can promote or manage their use. What are biosimilars? The European Medicines Agency defines a biosimilar as “a biological medicine highly similar to another already approved biological medicine.” It is produced from living organisms — humans, animals or microorganisms, meaning they aren’t created from synthesized chemicals. They are also