It appears that benchmarking plan advisors will become as common as benchmarking funds and record keepers. As noted in a recent NAPA Net post, the industry has actually come up with an advisor RFP template similar to the SPARK RFP for record keeping services. The problem with benchmarking record keepers — and now advisors vs. funds — is that it’s really hard to assess value or outcomes compared with fees. With funds, it’s relatively easy to determine if they performed well, but how do we measure performance of record keepers and advisors? Fees alone tell a one-sided and distorted story. Listing all the services that the advisor performs (or should perform) shows the lack of value compared with fees charged, no matter what they are, for the estimated 75% of advised plans serviced by “blind squirrels.” David Witz of FRA Plan Tools outlines the case and the issues surrounding plan advisor benchmarking in a comprehensive article published in the Fall 2012 edition of ASPPA’s Plan Consultant magazine. While it’s getting easier to determine advisory fees and potential services, the question of value will remain until we can benchmark outcomes like we do with funds.
John, better if we cd link to the article on ASPPA’s website but not require a password
http://www.fraplantools.com/uploads/Plan%20Consultant%20Fall%202012.pdf
