According to the financial services industry, the number one reason that clients leave their financial advisor is lack of contact. It is pretty much the same with retirement plans. When clients don’t get called or visited it sends a signal that the advisor doesn’t care or takes the business for granted.
So how do you know if your retirement plan is being ignored?
Well, that depends on you, the client. If you have a retirement plan as a small business owner and your employees are participating, the definition can vary widely. Apparently, the retirement plans being ignored either are unaware or are just complacent about it. Because when I approach them they all tell me everything is just perfect!
Rather than tell you if your retirement plan is being ignored, let me tell you what I think the minimum standard of service should look like.
1. Monthly Call. I think as a client you should demand this. Checking in every month to discuss the plan, movement in the markets, or just chat about the economy is acceptable. When I call my plans every month, I find out if someone needs help or if their may be a service issue brewing. If the advisor on your retirement plan is not calling you or your plan administrator monthly, you may want to consider a new advisor.
You can replace the advisor without dumping your plan. You may be perfectly happy with everything else about the plan except the service of your advisor. A simple piece of paper can replace your plan advisor at no cost to you.
2. Two Enrollment/Education Meetings Per Year. Most retirement plans like 401(k)s have a semi-annual enrollment period for new employees. This is a great time to have an advisor do an educational meeting as well. Topics can range from simple fund selection to what the economy might do this year.
If you don’t see your advisor face to face one or two times a year, this will not benefit you or your employees. Retirement education is sorely lacking with the American population. They need it now more than ever. So find someone willing to do it.
3. Calls During Market Volatility. Even though retirement plans are long-term investments, people still panic and get nervous during market volatility. They will do dumb things with their investments in the short-term. I try to reach out by phone or email to reassure participants that “this too shall pass.”
If your advisor doesn’t call during prolonged drops in the stock market, then that may be a sure sign like the check engine light in your car, that their may be a problem.
4. Updates on Tax and Legislative Changes. Finally, when something changes on the tax and legislative front. This can be anything from a small change in the contribution limit on 401(k)s, or big changes with retirement plan rules. I’ll be fair here, this type of change is not often, but when it does occur you need to know about it.
I’ve spent my whole 20 years of my career working with small business retirement plans. I love educating employees about their choices and what it all means. I’ve spent an hour with just one employee at times. So if you feel like your plan is being ignored, I can help. Write me at firstname.lastname@example.org, or call me at (859) 225-2596.