As a way to differentiate themselves from the competition and enhance client retirement plan services, a growing number of advisors are promoting 3(16) plan administrator services. With such heightened awareness to ERISA fiduciary responsibility and liability, a professional partnership between 3(16) Plan Administrators and financial advisors can provide clients with a comprehensive retirement plan fiduciary solution to help reduce the client’s labor burden and fiduciary liability associated with plan administration.
Benefits of a Partnership Between 3(16) Plan Administrators and Financial Advisors or RIAs
Considering less than 50% of plan sponsors recognize the business and personal liability associated with sponsoring retirement plans, advisors are aptly positioned to educate their clients on their fiduciary responsibility and potential risk of financial loss due to penalties assessed by the Department of Labor (DOL) or Internal Revenue Service (IRS) for non-compliance. Also, litigation brought upon the plan by participants is growing in popularity and the cost to defend lawsuits in connection with plan administration is substantial. With increasing government oversight of retirement plans and the explosion of lawsuits in this area, advisors are seeking to expand their roster of services to include a 3(16) Plan Administrator.
By partnering with a 3(16) Plan Administrator, such as NPPG Fiduciary Services, advisors can deliver a comprehensive retirement plan fiduciary solution to clients. This beneficial partnership streamlines the challenges often faced by plan sponsors in meeting their ERISA fiduciary responsibility.
Compliance
A strategic partnership between 3(16) Plan Administrators and financial advisors provides the plan sponsor with a valuable resource to delegate most of their fiduciary responsibility to an ERISA professional skilled in the intricacies of retirement plan compliance.
By hiring a 3(16) Plan Administrator, a plan sponsor can delegate the responsibility and liability of many administrative duties to experts who perform the following functions:
- Reviewing and verifying compliance testing
- Reviewing the Form 5500 for accuracy and signing the return
- Responding to IRS and DOL inquiries
- Monitoring the reasonableness of vendor fees
Client Labor Burden
Considering the highly complex nature of ERISA compliance regulations, it’s important that the plan sponsor be aware of operational duties that must be performed to keep their plan in compliance and protect their liability. In an effort to reduce risk concerns, such as missed contributions, verification of compliance testing and monitoring service provider fees, diligent financial advisors and RIAs (Registered Investment Advisors) are partnering with 3(16) Plan Administrators to holistically protect their client’s liability.
Partnering with a 3(16) Plan Administrator provides plan sponsor/clients with some of the following fiduciary services:
- Named as a Plan Administrator in the Plan Document
- Verify and approve loans and distributions
- Review and distribute mandatory notices
- Determination of participant eligibility
Differentiating Factor
Partnering with a professional fiduciary service provider, such as NPPG Fiduciary Services, can help financial advisors differentiate themselves from their competition and grow their business. By offering the most comprehensive ERISA 3(16) Fiduciary Service available, NPPG partners with financial advisors and RIAs to not only reduce the plan sponsor’s fiduciary oversight responsibilities, but also to help them protect company assets and build a stronger competitive strategy.
Since the market for professional services is crowded, it’s vital that financial advisors differentiate themselves to stand out from their competitors. Don’t let another advisor take business away because they offered 3(16) Fiduciary Services as part of their client proposal and you did not. Bring the option up before your client does. Offer NPPG ERISA 3(16) Fiduciary Services as part of your proposal today.