Providing a Retirement Plan for the employees of your business can be confusing. The responsibilities of running a business is complex enough without adding additional concerns and duties. The role of a Financial Advisor for your plan is integral in the proper running of the retirement plan. The team helping with the administration of your 401k forms a triangle- Third Party Administrator, Record keeper, and Financial Advisor. During my years in finances, I have learned 5 very important services to be expected from the Financial Advisor on your retirement plan.

  1. A primary role of the Financial Advisor on the retirement plan for your business is to provide guidance on investment selections. Each retirement plan should provide a variety of choices of investments for your employees to select from. The advisor should be familiar with the selections offered by the record keeper(the company who holds the funds for the plan) and give guidance to the plan sponsor in selecting which of those funds are offered to your plan.
  2. Is your advisor offering investment advice to the participants? Frequently, we see employees asking for investment advice from the company individual who is responsible for the retirement plan (Plan Sponsor). This is not a responsibility that the plan sponsor needs to bear. The advisor should be working with the employees for questions and guidance on investment selection in their own accounts.
  3. How often is your advisor providing education to your employees? It is of concern how frequently I encounter employers who state the advisor on their plan has not come out to educate the employees for years!! Every business with a retirement plan, especially 401k or 403b, should have a minimum of annual education meetings. These meetings help the employees to understand how the plan runs, what the plan benefits are, and what their options are for the plan.
  4. The Annual Review should be done by the Financial Advisor. Retirement plans can provide many advantages for the employer and employee with multiple layers of saving available. Has your advisor provided an annual look at the businesses maximum use of retirement plan advantages? The use of 401k contributions, profit sharing, and cash balance plans can combine to give substantial tax benefits for the business owner. Are you aware of these options and reviewing them yearly?
  5. The Investment Advisor on a retirement plan does not only assist in the selection of investments held within the plan, but also provides due diligence on the selection and ongoing use of service provider (Record Keeper). Your advisor should be continually aware of the fees of your plan as well as the service. Combined with an assessment of your company’s needs, size of plan, caliber of investment options, and breakdown of all fees your advisor should be giving you direction on your best service provider options.

Retirement Plans can be overwhelming at times. The most important part of creating and operating a beneficial plan for your employees is finding the right financial advisor. As Director of Retirement Plan Services for Redwood Financial Network, I see many plans which are serviced incorrectly or many business owners feeling overwhelmed. Take a look at your plan and make sure you are receiving the necessary assistance.


This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.