american+flag+generic2With the presidential primaries in full swing I can’t help but notice the similarities between the politicians who are essentially engaged in a very public job interview and my advisor peers who endeavor to gain new clients.

The similarities might not be completely evident at first. Whenever someone asks me what I do for a living, I struggle to give a concise answer because there’s a lot that goes into working with plan sponsors and participants.  I was recently asked this question and I jokingly retorted, “I’ve made a career out of telling people what they don’t want to hear.”

What’s that got to do with politics? Politics is important business because the laws and regulations crafted by our elected representatives have a tremendous cumulative effect on our lives. Unfortunately, we’re fed a constant diet of slogans and vagaries aimed at distracting us from the important issues that face our leaders.

And that’s just like what’s going on in the advisor marketplace. Plan sponsor laws are demanding, stringent, and adherence is absolutely critical for success – and too often, instead of talking facts, competition ends up centered on a constant diet of slogans and distractions.

Delving into weighty issues like liability and fiduciary responsibility on a “first date” with a prospective client isn’t necessarily the most glamorous courtship strategy but I honestly believe that it is critical for plan fiduciaries to firmly grasp their responsibilities.

We constantly remind our clients that they are fiduciaries and that offering a plan to their employees comes with an inexhaustible list of responsibilities. Qualified retirement plans are subject to a host of regulations. Not only do employers have the IRS and DOL on their heels, but they also have an entire industry of attorneys looking to win judgments against them for failing to act in the best interest of their employees.

Too often, advisors employ a sales pitch reminiscent of political season: light on substance and heavy on distractions. Big promises are made, all of which imply deliverables dependent exclusively on the systems and capabilities of the advisor.

As is the case in politics, employer-sponsored retirement plans require the involvement and dedication of all the interested parties.  You cannot just hire an advisor (or politician) and walk away until the next annual plan review (or election).  I don’t care how great an advisor is, if the plan sponsor is unwilling to engage the process in a meaningful way then the result will be less than satisfactory.

Granted, good advisors will limit the burden of their client’s involvement and spare plan sponsors the excruciating details. But if an advisor tells you that they’ll take over and handle all of your responsibilities for you, proceed with caution.  While advisors can share some of your responsibilities with you, we can’t absolve you of your fiduciary duties.

If you’re considering a new advisor, ask good questions.  If you don’t know what to ask, Google “What should I ask my 401(k) advisor?” or consult your peers.  Talk to current clients of the advisor to see if they really deliver on the promises they are making.

Advisory Services offered through Annex Wealth Management®, LLC. Securities offered through H. Beck, Inc Member FINRA & SIPC. Annex Wealth Management®, LLC and H. Beck, Inc are separate and unrelated companies. This site has been published for residents of: AZ, CA, FL, IL, MN, NC, SC, TN, TX & WI ONLY. By entering you certify you are a resident of one of those states. All information herein has been prepared solely for information purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell, any security.


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