Live-bid benchmarking is a necessity for advisors who want to ensure they’re meeting their fiduciary obligations. But while traditional methods are necessary, they’re not sufficient to meet all the needs of today’s retirement plan advisor.
Rather than looking for a one-size-fits-all solution, wouldn’t it be better to have a larger toolkit to draw from to meet your benchmarking needs? PlanFees was developed by listening to the shortcomings advisors have expressed about their current tools. We spoke to all kinds of advisors — ranging from independent operators to small shops to practitioners in mega-sized firms. Here are some of the issues they have with traditional benchmarking methods.
Too time consuming. While taking a plan out to bid every 3-5 years is a necessary fiduciary duty, we consider adding annual benchmarking on the off years the gold standard of practice. Performing an annual benchmark can aid in client retention, and offer additional protection against 401(k) lawsuits, so it’s something you want to have the time to do for all your clients. However, traditional benchmarking is an involved process that takes too much time to be used as a yearly checkup on the off years. That’s why we created PlanFees — a tool that produces benchmarking reports in just two minutes — to solve this problem. Plus, our enterprise-level solution provides much needed scalability for large firms.
Unreliable data sources and missing factors. The PlanFees benchmark universe is based on a database of live-bid quotes from over 60,000 retirement plans with more than $500 billion in total assets, offering an unprecedented degree of accuracy. A fee benchmark is only as good as the data it’s based on — and can impact its utility whether the benchmark is used for renegotiating fees with vendors or documenting the reasonableness of plan fees. Additionally, unlike many traditional benchmarking tools, PlanFees accounts for TPA fees, allowing you to quickly and easily benchmark for both bundled and unbundled retirement plans.
Too detailed for prospecting. PlanFees lets you create a personally branded, clear and concise benchmarking report that you can review with a prospect in minutes. We know that sponsors and participants alike tend to take a closer, more critical look at their retirement plan performance during down markets, which means the current crisis should create opportunities for advisors looking to grow their book of business. PlanFees can serve as a great door opener and conversation starter with sponsors around fees and overall plan performance.
Hard to customize. Easily adjust your benchmark for number of participants and assets with simple on-screen sliders. And PlanFees lets you enter fees as fixed costs or percentages, so no more time-consuming decimal point conversions necessary to get a true “apples-to-apples” comparison. Plus, you can choose to display only the data you want on your report — reveal low or high comparisons (or both) to suit your needs. More options for customization means a more meaningful and useful benchmark for uncovering areas of fiduciary concern as clients and prospects are presented with benchmarking data that’s highly relevant and applicable to their organizations.
Too inconvenient. While conducting a comparative analysis of plan costs through requests for proposals is useful, it’s a cumbersome process that can take many steps from start to finish. Now more than ever, advisors are under greater time pressure as they are helping sponsors and participants respond to the COVID-19 crisis. PlanFees offers an easier and more convenient alternative. All you need is a smartphone and a fee disclosure document to generate a report using our advanced optical character recognition technology. So you can squeeze a benchmark into your schedule no matter how busy you are right now.
PlanFees represents the next generation of fee benchmarking solutions for retirement plan advisors. Whether you need a quick fee checkup or client check-in, a robust prospecting tool, a more accurate and reliable method of obtaining apples-to-apples fee comparisons or an efficient way to benchmark a large number of plans every year, PlanFees can help.