Small business plans are a challenge to me because there aren’t many situations where that will help grow my practice. When it comes to plan documents, I can’t compete with free plan documents from the plan custodian.
Most of these small plans are so poorly run, they don’t know when their plan is possible legal trouble. In this retirement plan business, you get what you pay for and sponsors of these small plans (SEPs or SIMPLEs) pay nothing. They get no administrative help and absolutely zero financial guidance. The people who need the most don’t get it because they have convinced themselves that simpler small business plans are better. When it comes to savings and compliance, a fully qualified plan is the way to go.
That is why I believe more focus is needed in trying to convince these small plan sponsors that the world of qualified plans might cost more, but the costs are outweighed by the efficiency and retirement savings they bring.