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As business owners, you are undoubtedly peppered throughout
the year with calls from various prospectors, wanting
you to upgrade this, take another look at that,
and generally improve your business. Sometimes, these
prospectors may have some good timing—call it
the luck of the dial—as to your current concerns.
Usually, the improvements you decide on increase efficiencies
or enable improved workflow, but come with costs that
have to be weighed for effectiveness over the long
run. Conversely, changing your company’s retirement
plan provider may save you thousands of dollars right
away by lightening the fees you are paying for your
plan’s services.
The retirement plan you had originally set up for
your company may not be the most suitable one for you
now. A little known fact is just how much the retirement
plan market has changed over the last few years.
Plans are available now that can save companies thousands
of dollars in administrative and fund management fees.
That’s money that can go right in your pocket—or
toward improving your new phone system, of course.
Three areas to look at when reviewing your retirement
plan with your trusted Financial Advisor are: Fees,
Funds and Fiduciary Responsibility.
- Fees can be tricky: some providers are better than
others about disclosing administration and management
fees of funds as well as any wrap fee that may exist.
Also, some providers have changed their pricing structures
and your plan may still be set up on the older (and
more expensive) pricing model.
- Funds: Many providers are moving toward an increase
proprietary requirement, meaning more of your funds
in your lineup have to come from only one fund family.
With the recent scandals from fund companies, that
trend is in direct opposition to the theory that
multi-fund family plans offer you ways to avoid funds
or fund families that are under scrutiny.
- Fiduciary Responsibility: As we become a more and
more litigious society, fiduciary concerns are heavy
in the minds of business owners. Making sure to offer
funds in each style box, asset allocation funds,
meeting ARISA requirements and accurate administrative
services are just a few of the keys to ensuring fiduciary
stability.
Working with a team of professionals who handles this
type of business is a must. One of the ways to help
ensure you are getting an objective opinion is to hire
a Financial Advisor as a consultant to aid you in your
review. That advisor can assist in setting up vendor
presentations for you, aimed toward meeting your criteria
and customized toward the size of your company.
Attracting and retaining excellent employees isn’t
easy. Your company’s retirement plan can be an
appealing benefit for employees, but it doesn’t
have to cost you as much as you might think. A review
of your current situation may find you are good where
you are, but as your company grows, so do you options.
Van Kampen Targets—Achieving
Defined Contribution Success, 2003.
Van Kampen Targets—Achieving
Defined Contribution Success, 2003.
10/04 - BACK
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