The "Real" Role of a 401(k) Plan Financial Advisor. 

Fee Disclosures: Part II?.

The DOL may require another guide to help plan sponsors understand the first guide of fees.

One of the many projects that the Department of Labor (DOL) is working on; gets us back to the Section 408(b)(2) disclosures. 

Shortly, the DOL may amend the disclosure regulations to require a guide or supplement should be issues to accompany the fee disclosures that service providers hand out to their plan sponsors.  Apparently, the DOL thinks that the disclosures or multiple forms handed out to medium or small sized plans have been confusing.

Of course they are, these plan provider disclosures were most likely written by lawyers whop get paid hourly to write documents in legalese and then get paid hourly to interpret these legalese documents. I know, I used to work for some of these firms.

So if you are a plan provider, you may want to look at your current disclosures and see what's in easy to understand English and what's not. The guide that the DOL may require is probably some form of index that will allow plan sponsors to identify where the required fee disclosures are in the disclosures.

I think that if your disclosures need some sort of map, then there is something clearly wrong. While we all need legalese to limit our liability, it's important that plan sponsor understand your fees, to allow yourself to be competitive in the marketplace because confused clients aren't particularly happy clients.

If there is any guidance from the DOL on any guide requirements, I'll let you know. 

The second deadly sin for plan providers: Complacency.

You snooze, you lose, it's that simple.

The movie Seven taught me that the seven deadly sins are wrath, greed, sloth, pride, lust, envy, and gluttony. Over time, I'll develop a deadly sin list for retirement plan providers. I have touched upon the first deadly sin for plan providers, which is arrogance, which I have covered before.

The second deadly sin is complacency. Complacency is a two fold, being complacent in the retirement plan industry and being complacent with your clients.

Any business whether it's retirement plan based or not, has to change with the time because fact is that no industry is immune to change. You need to be ahead of the game and understand any new changes that go on. Ask the folks at Blackberry about complacency. If you park your car on the raceway oval, don't be surprised everyone else passes you by.

Working with your plan sponsor clients, complacency is all about taking your clients for granted and not reviewing their plan for new plan design studies, cost analysis, or plan provider searches. I've seen too many plan sponsors lose clients because these reviews come from a competing provider. Time and time again, I would hear the client ask why their current provider didn't think of a new plan design first or review of plan fees.

Retirement plan and the retirement plan industry are fluid, which means what is good today maybe not good for tomorrow. You can never be too complacent because losing your client or your competitive edge is just around the corner.

Networking with other plan providers is more than a quick score of referrals.

It's more about how they can help you in the long run.

When a rock band goes into a studio to record an album, they start writing new songs. Some m

When it comes to networking with other retirement plan professionals, you need to know that you rarely get referrals that lead to clients right out of the block. Relationships with other providers take time and don't necessarily lead to leads that directly lead to clients. Sometimes you're given an opportunity that gets a phone call with a prospective call and nothing else. Some opportunities get cold and then get warm again.

The point is that when you network with other providers in this space, whether it's a TPA, an ERISA attorney, or an auditor, it's more than just an opportunity to get clients. Developing a network of highly competent retirement plan providers can augment your practice. Instead of hiring an ERISA attorney or an expert on plan administration, you can pick up a phone and call an expert, most of the time the advice is free. When you have existing and potential clients, a good relationship with plan providers can get you the help you need in managing your clients. They can help you with plan design issues, plan document issues, and spotting problems that can be nipped in the bid before causing the client potential harm.

Networking is about developing relationships; it's not about the quick score. Referrals and opportunities can come indirectly as the result of relationships with these providers; you can be surprised how the power of the word of mouth works.  Finding the right team of plan providers can help you in ways much more fruitful than just clients.