PLANSPONSOR - August - September 2022 - 18

PROVIDER RELATIONSHIPS |COVER STORY
meeting its goals-i.e., 76% vs. 65% for non-advised sponsors.
Further, plan advisers can help the sponsor create or modify
plan documents, or help make sure the plan is meeting up to the
requirements outlined in an existing plan document.
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Kathleen Roche, vice president, business development strategy
at Ascensus in St. Petersburg, Florida, says, traditionally, plan
sponsors hired plan advisers to help with the three Fs: fiduciary,
fees and funds. All of those aspects of running a plan
remain important, she says, but today's plan advisers generally
do much more.
" The value advisers bring is increasingly employee-focused,
working with sponsors to help improve employee outcomes and
satisfaction, and provide financial advice and guidance to participants, "
says Elizabeth Pathe, head of DCIO [defined contribution
investment only] sales at Fidelity Institutional in Boston.
Of sponsors that use a dedicated financial adviser, 44%
report that more than three-quarters of eligible employees
participate in their 401(k) plan, according to a Morgan Stanley at
Work survey; this compares with one-third of employees at plans
without a dedicated financial adviser.
Among the services that advisers may offer are fiduciary
training for committee members and other employees, one-onone
meetings with participants, and consultations regarding plan
design or investment choices. Therefore, it is important for the
sponsor to think about its needs when selecting a new adviser.
A sponsor that prioritizes improving outcomes might want
to choose an adviser who specializes here-one " not only [aiding
with] investment menus and plan design, but also helping
employees strengthen their financial well-being, " Pathe says.
These various services reflect different levels of fiduciary
certification and involvement (see sidebar), so it is important for
the sponsor to ascertain what type of help it needs and in what
capacity a specific adviser will or is already working with it.
VARIATIONS
O
ne factor driving many plan sponsors
to hire a plan adviser is a desire
for that expert to take on some
of the fiduciary responsibility for
the
plan. Among plan sponsors surveyed by
Morgan Stanley at Work, guidance about
fiduciary and regulatory concerns ranked,
after oversight on investment management,
as the most important advantage
that financial advisers offer.
" Some of the best plan advisers I've
seen start and end with being a fiduciary, "
says Greg Holgate of Lincoln
Financial Group. " They come in and train
the committee and talk about the idea of
being a fiduciary, and weave it through
everything they do, from investments
to plan design to going to market. They
hang everything under that umbrella of
being a fiduciary. "
As
the number of lawsuits filed
against plan sponsors alleging that they
failed to uphold their fiduciary responsibility
continues to grow, so does interest
18 PLANSPONSOR.COM August - September 2022
" They come in and train the committee
and talk about the idea of being a
fiduciary, and weave it through everything
they do, from investments to
plan design to going to market. "
in bringing in professional, third-party
fiduciaries.
" Plan sponsors are held to the fiduciary
standard, which means they must
act with the care, skill, prudence and diligence
of a [prudent] person acting in that
capacity, " says Tim Kohn of Dimensional
Fund Advisors. " ERISA [Employee
Retirement Income Security Act] basically
states that you [must] have the skills and
knowledge to act as a fiduciary, and, if you
don't have it, you have to obtain it, either
through education or through hiring a
vendor that can help. "
From a plan sponsor perspective,
even the act of hiring a fiduciary adviser
ON A THEME
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