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Being too long a provider can be bad too

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Being a long time plan provider for a client can be a good thing and it can be a bad thing. While having a long time base of clients is great for business and indicative of client satisfaction, it can be a bad thing too.

Being a long-term provider for a plan sponsor client can be a bad thing. It’s like the folks on my local board of education. The members of the board of education have run unopposed for years and there has never been accountability. When you run unopposed, you end up thinking that you are so great that no one wants to run against you. You also end up with a sense of entitlement because you have been there for so long.

The same can be said for long-term plan providers. There is that sense of complacency and the sense that this position as a plan provider is their divine right. Thanks to fee disclosures, the retirement plan market is more competitive and long-term plan providers may have more competition in keeping that business. The problem is that if you have been that plan provider before fee disclosure, you may still think you are in the good old days when their plan sponsor clients rarely reviewed plan providers.

So being a long-term provider is great for the pocketbook, but a bad thing if the provider loses sight of the ball.

 

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