401(k) Financial Advisors have been getting better, but there is still room to grow

When I started in this business many moons ago, most financial advisors were not aware of their role as a retirement plan advisor when it came to handling their plan sponsor clients. Most advisors were mailing it in, pocketing the quarterly fee without meeting with the client or not understanding what the fiduciary process was all about.

Thanks to the Internet and changes on the industry such as fee disclosure and the upcoming fiduciary rule, I believe that mot financial advisors understand that they have a higher duty than their colleagues from their past. While they understand their obligation, many advisors still don’t know how to fulfill it.

As part of my practice, I have been assisting advisors in pursuing a role as an ERISA 3(38) fiduciary for a flat fee.While many advisors around the country reach out to me, I am still amazed how some still don’t understand their role despite all the changes.

So while most financial advisors are educating themselves over many of the changes in the retirement industry, there are still so many financial advisors still unaware of that role. Since most 401(k) plans are participant directed, picking top mutual funds for a fund lineup is overrated. It’s more about working with the plan sponsor and developing a fiduciary process that will help a plan sponsor minimize their liability under ERISA 404(c).

So while financial advisors are getting smarter about their role, there is still much for them to learn and do.

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