PANC 2010: Things You’re (Probably) Doing Wrong as a Plan Adviser

A panel at the recent PLANADVISER National Conference discussed things retirement plan advisers may be doing wrong without knowing it.

Melissa Cowan, Director and Program Manager, UBS DC Advisory Program, said benchmarking their own fees is important as a business practice and many advisers don’t take the time to do this. Benchmarking fees, to ensure that the services offered and the time spent on them are reasonable, will show whether an adviser’s business is profitable.  

Cowan also pointed out that many advisers don’t properly prepare for meetings. She said advisers should put the “meat” of the agenda on top, collaborate with plan sponsor clients about what should be on the agenda, and keep to the time limit.  

Nevin Adams, Editor-in-Chief of PLANSPONSOR and PLANADVISER and moderator of the panel, added that advisers shouldn’t include in or start off the meeting with irrelevant information, such as what the market is doing. And, an attendee of the conference adds that if the sponsor is a prospect, advisers should sell themselves first in the meeting; if the sponsor is already a client, start the meeting off with the client’s concerns.  

Bradford P. Campbell, of Counsel, Schiff Hardin LLP, says one mistake advisers make is not knowing whether they are a fiduciary. “If you act like a fiduciary, you are one,” he says. He warns that advisers that don’t know whether they are a fiduciary are probably not charging clients as such and are probably not insured as such by an Errors & Omissions (E&O) policy.  

Campbell also says advisers that are cross-selling rollover accounts for terminating participants are entering a grey area. If advisers are fiduciaries, regulators might see them as taking advantage of their fiduciary status. 

Campbell says advisers can do this right with a thoughtful approach. Only approach participants after they separate and offer a tremendous volume of disclosure. Or, advisers should only do it if a participant approaches them, or put it in the contract with the plan sponsor client that cross-selling is ok.  

Rick Shoff, Managing Director, Advisor Support Group, CAPTRUST Financial Advisors, contends that advisers have a tendency to make the simple complex. They have so much information and desperately want to get it out that they can overload the client with too much.  

Shoff adds that advisers sometimes get distracted by always chasing the newest or better process or solution. “Don’t keep changing on clients, especially if not adding value,” he warns.  

In addition, Shoff says advisers should not get off track from getting and keeping clients.