Life after fee disclosure for plan providers

It was a great opportunity to speak in front of over 100 attendees at the Schwab National Conference in Scottsdale, AZ.  The audience was primarily third party administrators and registered investment advisors.

The speech was about life after fee disclosure and some ideas that I had concerning how plan providers can compete in a post fee disclosure world.

I reiterated that even though plan providers got their fee disclosures out, now maybe an opportunity to review their fee disclosures for clarity and conciseness. The reason being that the Department of Labor is considering an additional guide of fee disclosures that plan providers may have to prepare, what I call “the guide to the guide of fee disclosures”. In addition to maintain a competitive advantage, a more concise and clear disclosures of fees can help with your clients because I am convinced that confusing disclosures or too many pages of disclosures will create confusions and confused clients, often become former clients.

In addition, there needs to be further communications from plan providers to their clients on what they actually do. My wife jokingly tells people that she still doesn’t know what I do for a living. At least, I think that’s a joke. Too often plan sponsors don’t understand what their plan providers do, so fee disclosures may make unwise plan provider changes based on price and not understanding that the savings in costs may also be accompanies by a decrease in quality and breadth of services. Plan providers needs to stress their value to their clients because when we talk about the fiduciary responsibility of only paying reasonable expenses, many plan sponsors forget the second half of the question “for the services provided.”  Plan sponsors can pay more to get more and if they don’t understand that they get more in services, they maybe at a severe disadvantage if they make a change just on cost.

Once again, I am available for speaking engagements, far and wide including Bar Mitzvahs and First Communions (as long as those events are heavily attended by plan sponsors or plan professionals).

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