Now, I have friends who derive great pleasure from things like “puttering around” in the backyard, who relish the accomplishment of laying down their own carpet or wallpapering a bathroom, who derive great satisfaction from installing their own car stereo or home entertainment center.  But as for me, I’m happy to support our nation’s economy by paying someone who actually knows how to do such things.  It’s not that I CAN’T do those things, mind you—it’s just that they take time I don’t have to do things I’m not good at for a final result with which I am never completely satisfied.     

And, if I’m honest, because I don’t like those tasks, I put off doing them—as long as humanly possible.  

One of the most common information requests I get from advisers is help in proving to skeptical plan sponsors that they should hire an adviser.  While I don’t always know the particulars, the vast majority of these situations don’t arise where an adviser is already involved.  Rather, these tend to be situations in which the plan sponsor has not previously hired an adviser and is questioning why he or she needs to undertake that additional expense to do something they (still) feel perfectly capable of doing themselves.   

In truth, by the time you take into account the types of programs many providers now make available, with screened investment menus, pre-packaged investment policy statements, automatic enrollment and contribution acceleration campaigns, not to mention an expanding array of qualified default investment alternative (QDIA) choices and materials that tout the support of a large, sophisticated financial institution, you can hardly fault a plan sponsor for wondering why he or she needs an adviser.   

To me, the reason is simple: because, while a plan sponsor probably can fulfill his/her fiduciary duties without the assistance of an independent financial adviser, IMHO, left to their own devices, they are, quite simply, less likely to do so.  They are more likely (perhaps much more likely) to be beholden to a limited investment menu and “standard” fee structures, less likely to have regular and productive investment committee meetings, less likely to renegotiate their current arrangements on a regular basis, less likely to undertake needed change, and far less likely to exercise the discipline of a consistent process in doing so.  Like those “distasteful” household chores, even among the most committed plan sponsors, these complicated decisions tend to drift to the back burner of life. 

Hiring an adviser is no panacea for a plan sponsor who is not willing to own up to its fiduciary obligations—but, with the right adviser, that decision can go a long way toward helping ensure that those fiduciary obligations are met.