On the hunt: How 401(k) plan sponsors can revamp the advisor selection process (BenefitsPro)

North Pier’s Senior Consultant Greg Metzger‘s recent article for Benefits Pro evaluates three options for selecting plan advisors.

“As a 401(k)-plan sponsor, you bear a tremendous amount of fiduciary responsibility, and among those duties, selecting the right plan advisor, is among the most consequential fiduciary decisions. This decision is not only critical to investment outcomes and the security of participants, but as the plan sponsor, a subpar or incongruent advisor relationship and search process could leave you and the organization personally liable to litigation.

According to research by Fidelity Investments, 92 percent of plan sponsors work with an advisor. Despite the overwhelming majority of plan sponsors relying on advisors to carry out their fiduciary duties, the search process is often overlooked and underemphasized when it comes to plan advisor evaluation and selection.

1. Complacency breeds failure

ERISA specifies that fiduciaries are responsible for the oversight of covered service providers, such as advisors, and are required to employ a prudent set of criteria to determine “reasonable expenses” for “reasonable and necessary services.” Therefore, the selection of an advisor is a fiduciary act in and of itself, and it should be handled with the same prudent process…

Read the full article at BenefitsPro.

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