Part 5: An understanding the advice is individualized and based on the needs of the retirement investor

Maybe it is easier to explain when advice might not be individualized to the retirement investor.  What if the vendor puts out a proposed fund line-up (NO)?  What if the broker dealer puts together a preferred list of funds or stocks (NO)?  Now what if the advisor took that preferred broker dealer list and narrowed it down to picks for that individual plan sponsor (Probably)?

Why would the average plan sponsor allow for advice that wasn’t regular, with a contract, for compensation, a primary basis, and individualized?  The main reason we see is plan sponsor confusion.  The delivery and sales process for retirement plan advisors can be confusing.  Everyone says they are a fiduciary, everyone promotes similar services, and everyone appears to be an expert.  What is the average plan sponsor to do?

Ask a lot of questions.  How much of the advisors business comes from qualified retirement plans?  Can you see a sample client contract?  Can you speak to some of their retirement plan clients?  And most importantly, are they dually registered?  If they have a broker/dealer affiliation, it is very difficult to tell what side of their business you are working with.  If you are working with a firm that is registered solely with the Securities Exchange Commission (or state for smaller firms), at least you will know that you are working with a fiduciary.  Then the question becomes, are they any good?