Why Hire an Advisor for your Company 401k Plan?

    • Have you determined the total cost of administering your company’s retirement plan including a breakdown of how much each service provider receives?
    • Does your 401k advisor talk to you about more than the plan investments?
    • Do your current plan relationships allow you to focus on running your business, and not your retirement plan?

    If you answered “No” to any of these questions, it is time to re-evaluate your relationship with your current 401k plan advisor.

    Many employers aren’t aware of their duties as a 401k plan sponsor. This is where having an advisor who specializes in working with corporate retirement plans can provide tremendous value. While most employers hire an advisor to assist with the plan’s investments, this important function has evolved over the years to include more than just investment selection and monitoring.

    We have outlined three of the additional benefits employers receive when working with a specialist advisor for your company retirement plan.

    1. A dedicated point of contact

    How many times has an issue come up, and you didn’t know who to ask? An advisor can help navigate the complicated retirement plan landscape. A number of vendors are involved in running a retirement plan – record keepers, Third Party Administrators (TPAs), Custodians – and a good advisor will help you coordinate each and hold them accountable. An advisor will also serve as your “ombudsman” – a person you can turn to for help resolving inevitable issues. They can answer your questions about matching contribution or eligibility to enter the plan. A good advisor will help you find the answers you need and resolve any issues your plan may encounter.

    1. Specialized expertise and connections

    A 401k advisor will help your plan remain in compliance with the Employee Retirement Income Security Act (ERISA) and other Department of Labor and IRS rules. 401k advisors bring expertise on topics such as investment due diligence and documentation, annual compliance testing, and plan design.

    An advisor can also help your organization develop and implement procedures to reduce professional and personal liability. 401k advisors have specialized networks for such a purpose. When was the last time you called your attorney and didn’t receive a bill? Often, advisors are able to call on industry contacts to receive guidance and help without incurring a fee.

    1. Employee education and financial guidance

    Do your employees often ask how much to save, or how to invest their contributions? Are you answering them with specific recommendations? If so, you could be crossing the line that distinguishes between financial education and advice, which could lead to compliance issues and potential liability.

    These conversations should be directed to a financial advisor, as they are better equipped to evaluate a participant’s financial situation, including risk tolerance, diversification of assets outside the plan and retirement goals/objectives. Having this type of resource for employees will help them better prepare for retirement and will reduce the company’s liability.

    A 401k plan is a great way for employers to invest in their own retirement while offering a key benefit to their employees. Running your business is a full time job. By hiring an advisor, you’ll be able to spend less time administering your plan, and more time doing what you do best – growing your business!

    For more information on the importance of forming a relationship with a retirement plan advisor, download our ebook, “The Value of a Retirement Plan Advisor.”


McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.

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