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Advisor Due Diligence Checklist

Experienced plan advisor Trish Brambley outlines the 10 things plan sponsors should consider when looking for a new plan advisor:
• Is the advisor a fiduciary and willing to commit in writing?
• Are fees reasonable? (This assumes knowledge of the fees as well as who is paying them.)
• Do they specialize in the plan business?
• Are appropriate resources available in the firm? (Not based on the number of people, but the number dedicated to the plan business.)
• Does the advisor have clout with vendors?
• Do they have the right type of insurance?
• Can they explain things to committee members in an easily understandable manner?
• Are there potential conflicts — for example, is the advisor receiving additional compensation?

Not mentioned: Sponsors should find out who will be servicing the plan, not just who is selling it. Eventually, sponsors should be looking at advisor success metrics or whether participants in the advisor’s plans are improving their opportunities to retire successfully.

Having a checklist from an impartial third party can be a helpful tool to focus prospects on the right issues — or even get them off the dime and take action.

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