Having been in the retirement plan business for the last 24 years, I have learned something new almost every day and I’ve seen a lot of things that I could never believe I would see when I was an L.LM student learning about the qualified plan.
Having survived 9 years as an attorney for third-party administration firms and 3 years as a law firm attorney, you learn how to do business and how not to do business.
The most important value that I believe a retirement plan provider should have is honesty. You don’t have to be the best, the smartest, the hardest working, or the best value. You need to be honest because honesty maintains the trust that your clients have in you and if you are caught lying, then you have betrayed that trust and then you lose the client. The most important asset that you have in the retirement business is your reputation because providers with poor reputations don’t do as well as those that have good reputations. Honesty only enhances your reputation, it will never besmirch it.
Honesty is not just about being honest about fees, it’s about being honest with mistakes you make and forthcoming with any changes that the plan sponsor needs to make to improve their plan and limit their liability. Sometimes that honesty will cost you business; especially an actuary who tells the plan sponsor that it’s time to terminate their defined benefit plan and the actuary will lose that client. At the end of the day, the client’s needs do have to come first.
I have seen retirement providers of all sorts (TPAs, financial advisors, attorneys, and auditors) do wrong to their clients by being dishonest and less forthcoming with their clients. I never wanted to take that road because my fear is that the client would find out that I did wrong and I never want to betray my client’s trust.
With fee transparency and so many tools out there to gauge a provider’s work, the incentive to be dishonest is being minimized.
As a retirement professional, your word is your bond with your client. Without that bond, then you will not have that client or a good reputation in the industry.