The Bottom Line
This year's PLANADVISER Adviser Value Survey shows that advisers are making a difference
Reported by Lee Barney
Art by Christian NortheastWinston Churchill once said, “However beautiful your
strategy, you should occasionally look at the results.” The same can be said of
the work of retirement plan advisers. Despite all of the cutting-edge changes
you may bring to plan design and the one-on-one consultations you have with
participants, at the end of the day, what really matters is whether you are
guiding the plan to better results.“Shedding Light” unveils the results of the 2016 PLANADVISER Adviser Value Survey. This year, to delve deeper into whether or not advisers are effecting change when it comes to key metrics—including average balances and deferral rates—we looked at the results of plans that use advisers who serve as a 3(38) or a 3(21) fiduciary. That analysis point allows us to better examine plans using what we would consider retirement plan specialists. In a number of areas, advisers are bringing about meaningful change—and in some cases those advisers serving as fiduciaries, even more. We discovered, for example, that only 39.6% of plans without an adviser have automatic enrollment, but when an adviser becomes part of the equation, that percentage increases to 46.3%. When the adviser is a 3(38) fiduciary, it jumps to 52%, and when he is a 3(21), to 51%.
This issue also showcases the highly anticipated 2016 PLANSPONSOR Retirement Plan Advisers of the Year. The winners and finalists in this year’s four categories can be seen. Having served as a judge for five years, I can attest that it is a challenging process, as all of our finalists are extraordinary. We hope you will share our admiration for their work and be inspired.
With the onslaught of litigation against plan sponsors, and regulations continuing to evolve, you will never run out of topics to teach your retirement plan committees. “Basic Training” covers the essentials that committee members must know about, starting with their fiduciary responsibilities.
Some in the industry believe the Department of Labor’s newly published fiduciary rule will prompt more advisers to adopt one of the three fiduciary structures—a 3(16), 3(21) or 3(38) fiduciary relationship. “Fiduciary Outsourcing” outlines the pros and cons of each.
With fee lawsuits showing no signs of abating, your clients look to you to ensure they are doing their due diligence to find the lowest-cost, most appropriate investment choices for their plan. “The Appeal of CITs” lays out the reasons behind the expansive growth in collective investment trusts (CITs) and some extra considerations for you to discuss with clients. For those of you serving small plans, it often comes naturally to leverage personal relationships to land new business. However, mixing friends and business isn’t always for the best. “Getting Personal,” page 68, spells out some of the setbacks you need to avoid in this space.
As always, we hope you enjoy these stories, and we welcome ideas of your own.