When I started my own law practice 3 years ago, it was a struggle. To this day, it’s still a struggle. When I started my own practice, I really tried to develop relationships with financial advisors and third party administrators just like I did when I was working at the law firm.
One of the relationships that I was trying to develop was with a Connecticut broker who seemed really interested in my past clients when I was working at a New York Third party administrator and a lot of interest in my Retirement Plan Tune-Up (the affordable legal and fiduciary plan review, only $500 through September 30th. Cheap plug here).
So I schlepped all the way up Interstate 95 for the meeting and they seemed very interested in my plan review and they thought they could refer me so much business that they were asking for some sort of exclusivity or favored nation status. So it looked like I was getting a nice pipeline of business. To cut it short, I got blown off as the broker said that his team was concerned that I didn’t have a big enough name to partner up with. I thought that was kind of ridiculous since my old firm wasn’t that well known outside of Long Island and the plan review service was far more important than any “brand name”. Of course thanks to my articles and readers such as yourselves, I have a name or brand name.
The point is that when picking plan providers, plan sponsors may prefer to use plan custodians, third party administrators, or financial advisors that have names or brand names. Having your plan administered by one of the largest mutual fund companies sounds great because it’s the name you know, but it’s a major headache if the name you know doesn’t know how to properly administer the plan.
Bernie Madoff was a name you would know if you were a high flyer and we all know how that turned out.
When it comes to hiring your plan provider, concentrate less on name and more on competence.