As a retirement plan advisor, one of the most critical parts of your job is ensuring reasonable plan fees. High fees can erode retirement savings and lead to legal entanglements if not properly managed. But having powerful and robust tools at your disposal can help you discharge your fiduciary duty more efficiently and effectively — as well as help provide actionable solutions.
Remain Vigilant
The first step is recognizing when there may be an issue with unreasonably high fees. PlanFees Prism Total Fees Benchmarking helps make this easy. It’s a convenient, user-friendly platform that lets advisors perform a fee checkup in just two minutes, either annually or whenever the situation warrants. This proactive approach to fee analysis will quickly reveal if a plan’s fees have become too high relative to those of comparable plans.
But what happens if you do uncover potentially high fees?
Dig Deeper
First, it’s important to drill down on any underlying reason a retirement plan might warrant higher fees. For instance, if the plan has recently added a suite of new services or investment options, these could justify increased costs. Therefore, an in-depth analysis of any contributing factors is a crucial part of your analysis.
Develop an Action Plan
Once you have a clearer sense of the source and reasons for higher-than-average fees, it’s time to identify opportunities for savings. This is where RFP Express can become a valuable resource for you. You’ll be able to generate instant quotes from service providers you know and trust and receive custom quotes in 24 hours. Use this information to negotiate with current providers to lower fees or increase service — or begin the process of establishing a relationship with a new provider to ensure a fair balance between cost and value to the plan.
Document and Communicate Your Process
A vital aspect of managing high fees is maintaining clear documentation of your process at every step. This helps to build trust with plan sponsors and participants by demonstrating how you actively manage the issue. It also ensures you have a clear record of your actions, which can be critical in the event of any legal dispute.
Moreover, transparent communication with plan participants is key. By clearly explaining the underlying cause of higher fees and outlining steps being taken to address them, you can help foster greater trust in the plan — and the plan sponsor.
A 5-Step Process
Finally, detecting high fees is never a one-and-done task. With PlanFees’ suite of innovative benchmarking tools, you can continue to monitor and address fees on an ongoing basis, ensuring they stay within reasonable limits and taking prompt action when necessary.
With PlanFees and RFP Express, you have robust tools at your disposal. PlanFees’ benchmarking technology can help you detect, analyze, remedy, document and monitor high fees — and provide a higher level of service to clients while helping to safeguard the financial future of plan participants.
