When gauging the effectiveness of the retirement plan’s financial advisor, one thing that 401(k) plan sponsors forget to consider is the interaction between the advisor and the plan participants.
While it’s important that the financial advisors cover all the bases when sitting down with the plan sponsor when it comes to reviewing the investment policy statement and reviewing investment options, it’s also important to have an advisor that successfully engages with plan participants.
That means making sure that the advisor regularly schedules enrollment/plan education meetings as well as preparing materials that make it easier for plan participants to make informed investment decisions. That means looking at the scheduling of the meeting, the attendance of meetings, as well as the participation rates in the plan. If you see an increase in plan participation after an advisor is hired, that’s one way to show that they’re doing a job with a positive impact.
It’s not enough that an advisor looks smart and sounds smart at the plan fiduciary meetings, it’s just as important that they’re engaging at plan participant meetings as well.