intro | PLANADVISER March/April 2017

Brilliantly Done

We salute the 2017 PLANSPONSOR Retirement Plan Advisers of the Year, both the winners and the finalists, for their brilliant work.

By Lee Barney | March/April 2017

PAMA17_Cover_300px.jpgThe 2017 PLANSPONSOR Retirement Plan Adviser of the Year finalists and winners are noteworthy for so many reasons. First and foremost, they are courageous enough to embrace best practices as these emerge, including automatically enrolling participants at deferral rates higher than the industry’s 3% norm; pairing that practice with automatic escalation, sometimes at 2% or higher; and performing full-blown re-enrollments to make sure no participant gets left behind.

On top of this, many have embraced the introduction of holistic financial education or financial wellness programs. Having served as a judge for this awards program for the past six years, I can attest to how impressive these advisers and teams are, and to the brilliant work they do. I hope you enjoy learning about them in this issue and reading Q&As with them online at

What do plan sponsors think that retirement plan advisers are doing right? And where are those in your field falling down and needing to do a better job? “Lighting the Way” gives the results of the 2017 PLANADVISER Adviser Value Survey. It is based on the responses of 4,218 defined contribution (DC) plan sponsors that participated in the 2016 PLANSPONSOR Defined Contribution Survey, and compares responses of those who work with a plan adviser against those who do not. When it comes to management of the plan, adviser-led plans are more likely to review investments every quarter and be guided by a formal investment policy statement (IPS). However, you may be surprised that plans with advisers actually have lower average balances. This year, we took the results to a number of leading retirement plan advisers to ask them for their opinions on what the results showed—and what they think advisers need to do better.

If you are not paying attention to leakage from the plans you serve, perhaps you should be, as the industry continues to seek solutions to the problem of participants draining their accounts. “Taking It With You” reveals that as much as $89 billion leaves 401(k) plans every year, with two-thirds of this due to participants cashing out when they switch jobs, but also because of loans and hardship withdrawals that default.

“Assessing Independence” discusses the changes happening in the adviser industry as advisers who are affiliated with broker/dealers (B/Ds) discuss what it means to be tethered to commissions and in-house products in the current environment.

With nearly one in five (18.7%) retirement plans offering brokerage windows—and a whopping 49.6% of plans with $1 billion or more of assets offering them—this strategy is more common than you may think. “Window Guard” explains how to educate participants about the downside of investing on their own.

As many retirement plan advisers serve small plans, “Thinking Efficiently” is an eye-opening feature that explains how best to work with this market.

We hope you agree that this issue is rich with actionable ideas you can put into practice to enhance your work with plan participants and sponsors. Happy reading!