What a 401k Advisor Can Do For You?



Hiring a 401k advisor can be a great move for your company to make sure you are reducing risk for the plan trustees. 401k plan advisors have become more popular over the years as a benefit not only to employees but also to plan sponsors in need of help administering the plan. So what exactly does a 401k advisor do? I will explain the four different roles an advisor can accomplish in servicing your plan.


1. Fiduciary Responsibilities 

As a plan sponsor and/or plan trustee you have the responsibility to ensure you are providing the best plan possible for every member of your plan. A fiduciary advisor can ensure you have the right processes in place in fulfilling your plan duties. Examples of these services can be: sending notices out on time, tracking enrollment and eligibility, testing and reporting, timely contributions, tracking meeting minutes, plan benchmarking etc… These are all important factors that need to be in place for your plan.


2. Investments

Investments are obviously a key focus for any retirement plan and can often lead to the most questions from plan participants. A fiduciary advisor can make sure you have an Investment Policy Statement that is drafted and agreed upon by all parties. An IPS can lay out the exact process that goes into which investments are chosen and why those investments are to be included in the plan menu. Also, an advisor can speak directly to the members of the plan to help through understand the investment choices and provide guidance as to what may be their best option.  When it comes to investments it is also important that you have a diversified fund menu with appropriate investments.


3. Plan Design

Plan Design is a crucial factor for every 401k plan when deciding how the plan can function efficiently. The items that are considered under plan design are: company match, vesting schedule, profit sharing, auto enrollment, auto increase etc… A fiduciary advisor can make sure you are keeping up to par with other plans your size and in your industry. They can use methods in the plan such as increasing match to try and incentivize increased contributions into the plan.


3. Employee Education

You put together a great plan, have an excellent match and are checking all the boxes as a business owner, but do you employees know that? Do they feel the love? A 401k advisor can provide education to all employees so they are aware of the great benefits that are featured in the plan. An advisor can meet one on one or in a group setting with your employees to provide the details of the plan and also help them with a financial plan. Employee education should be consistent and tailored to each employee.


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