Have you ever asked yourself, “Am I really getting good help from my financial advisor for 401k?”
It’s a fair question. You and your employees are paying them quite a bit from your retirement savings, so it’s important to ensure they’re worth it. Unfortunately, a lot of people are finding out their advisors aren’t doing enough.
Ted Benna, the guy who helped create the 401(k), put it like this:
“Most of the investment choices are pretty similar. But advisors are still getting paid like they’re doing something special. That just doesn’t make sense—it’s wasteful and way too pricey.”So now’s a good time to ask: Is your advisor really doing everything they should?
Here are 5 key things your advisor should be doing.
1. Helping More Employees Join and Save
Your 401(k) advisor should be an expert in retirement plans. That means they should know how to design a plan that works well and how to get your employees more involved—making sure they’re signing up and saving enough for retirement.
But the truth is, many advisors don’t give enough support with the basics, like helping you pass important tests called nondiscrimination tests (NDTs). These tests make sure the plan is fair for everyone, not just higher-paid employees. In 2017 alone, nearly 30,000 companies failed these tests and had to fix it by giving money back.
If your advisor isn’t helping you keep employees engaged and making sure your plan passes these tests, it might be time to find someone who will.
2. Cutting Costs
Let’s be honest—401(k) fees are often too high. And if your advisor isn’t helping you lower those costs, they’re not doing their job.
Here are three things your advisor should be doing to help save you and your employees money:
Review and Improve Your Investment Options
Your advisor should regularly check the investment choices in your plan and replace any that have high fees with better, more affordable options.
Lower Recordkeeping Costs
As the industry changes, recordkeeping (the service that keeps track of everyone’s accounts) is getting cheaper. A good advisor should help you negotiate better pricing, whether you stay with your current provider or switch to a new one.
Charge a Fair Fee Themselves
If your advisor isn’t doing much to improve your plan, they shouldn’t be charging you a lot. What you pay should match the value you’re getting.
3. Taking Legal Responsibility (Being a Fiduciary)
You might have heard about companies getting sued over their 401(k) plans. It happens more than you’d think. Even big firms like Fidelity have been taken to court—by their own employees for offering bad investment options with high fees and poor performance.
Fidelity had to pay $12 million to settle a lawsuit, even though they didn’t admit they did anything wrong.
If your advisor isn’t legally responsible for helping you choose the right investments—something called acting as a fiduciary (specifically a 3(21) or 3(38))—you could be the one on the hook if something goes wrong. So it’s smart to have an advisor who’s willing to take on that responsibility.
4. Helping with Financial Wellness
Let’s face it—people are stressed about money. Even if the economy looks okay, many workers are struggling with personal finances.
Retirement is a big source of stress, so some 401(k) advisory firms are now offering financial education and personal money advice as part of their service.
If your advisor isn’t helping your team feel more confident about money, they’re falling behind.
5. Being Available and Checking In
Have you ever had a quick check-in call with your advisor where they just ask, “Everything okay?” and you say, “Sure,” even though you’re not really sure?
That’s a problem. If your advisor isn’t regularly checking in and digging into how your plan is actually doing, issues can pile up—things like paperwork problems, compliance issues, or employees not getting the help they need.
A good advisor doesn’t just call once in a while—they stay in touch, talk to different people in your company, and solve problems before they become headaches.
Bottom Line:
You’re paying good money to your 401(k) advisor or an annuity advisor. If they’re not doing the things we’ve talked about—helping employees, lowering costs, taking legal responsibility, supporting financial wellness, and staying involved—it might be time to find someone who does.
Retirement is a big part of life. You and your employees deserve support that truly helps.
So ask yourself:
Is your advisor really doing their job?
