For 401(k) Advisers, Time to Shelve Old Retirement Dogmas

By Darla Mercado

Mar. 19, 2012

For financial advisers who specialize in 401(k) plans, a successful participant outcome is the end goal. Defining exactly what success is needs some rethinking, however.

That was the conclusion reached by the finalists chosen for the American Society of Pension Professionals and Actuaries’ 401(k) Advisor Leadership Award.

Plan Sponsor Advisors LLC, a Chicago-based registered investment advisory shop with $18.1 billion in assets under advisement, took home the award this year.

The other two finalists were Greenspring Wealth Management Inc. of Towson, Md., and Retirement Resources Investment Corp. of Peabody, Mass.

Advisers at the firms noted that while investments within a plan may seem to be a pivotal factor to a client’s success, it’s really the heavy lifting of participant involvement that drives positive outcomes.

“There’s a recognition that plan sponsors need to move beyond the traditional measures of what they use to measure success,” said Don Stone, managing partner and chief investment officer at Plan Sponsor Advisors.

Participation rates, for instance, are a commonly cited measure of success, but that doesn’t mean much if workers are deferring only 3 percent of their salary. That’s the point that advisers need to get across to employees, he added.

Jim Phillips, president of Retirement Resources Investment Corp., agrees. “A summation of what we’re talking about is to take participants and make them into good decision makers,” he said.

Phillips noted that education and risk profiling for participants can go a long way toward getting them to understand the adverse impact of making impulsive investment decisions. As workers are contributing to their plans, they should consider whether the investment mix they have is still appropriate, and continue evaluating that into retirement.

Joshua Itzoe, partner and managing director at Greenspring, said that plan sponsors these days are expecting more from financial advisers who are fiduciaries to plans. Fee disclosure will require even fiduciary advisers to step up their game and provide more services to retirement plans.

For Itzoe’s firm, that means spending a lot of time on benchmarking, governance and helping retirement plan clients with compliance issues.

“Successful advisers need to show why they’re qualified,” he said. “The key is going to be service delivery and helping clients with areas that are outside the normal scope.”

Darla Mercado writes for InvestmentNews, a sister publication of Workforce Management. To comment, email

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