Investment Advice & Guidance for Plan Participants

[Guest danc4639]

My firm is exclusively a fee for service consultant and a Registered Investment Advisor. We advise plan fiduciaries on investments they select as choices for participants within their organizations 401(k)/403(b) plans.

As a general rule, we have advised plan sponsors to provide education and communication in support of participant choicemaking. We do not encourage plan sponsors to get involved in providing or facilitating investment advisory services for participants. We just think there is too much risk in that and that participants can obtain investment advice on their own.

Despite this, almost all financial services firms (mutual funds, brokerages, banks & others) want to provide participant advice services and are calling on employers to get in the door. Typically these offerings are for on-line services and the advisor firm wants to take .25% to .75% for advisory services.

I am interested in hearing from anyone on the following:

1. What is a competitive fee for participant advice?

2. Is there a standard service contract?

3. Are sponsors hiring the advice firm or is it a particiant decision?

4. Do standards exist for monitoring an advisors service?

5. What does advice (for a plan part) consist of other than how much to save & asset allocation?

6. Is there any value to this service?

Thanks,

DC

[david rigby]

I hope no one responds to (1). The information sharing on these Message Boards is too important to risk any accusation of price collusion.