I used to spend much time trying to explain irrational behavior through rational thought and it\u2019s really impossible. If you\u2019re a plan provider, don\u2019t waste your time doing that.<\/p>\n
There are some plan sponsors out there that would rather cut their nose to spite their face or continue with a bad plan provider because of a crazed notion of \u201cloyalty\u201d.<\/p>\n
Most of the time, the plan sponsors you will meet will make rational decisions in selecting plan provider and making any plan changes. Some just won\u2019t because of an irrational choice or decision.<\/p>\n
Seven years ago, I helped a plan sponsor out with their 401(k) plan.\u00a0 They had no financial advisor, they had no investment policy statement, they had no investment education provided to plan participants, and hadn\u2019t changed funds in a decade. They eventually fixed the plan, but they hired new plan providers without consulting me. I was offended by that because the same trustees who neglected their plan now all of a sudden thought they knew better than me because they didn\u2019t seek my opinion. They also changed third party administrators and picked one that wasn\u2019t suited for a plan that size. It\u2019s irrational, but that\u2019s what people do.<\/p>\n
Present day, the plan has a huge compliance problem that may cause the plan sponsor over $100,000. One of the trustees reached out to me while the other one spurned my services, probably because of a grudge or because they didn\u2019t want to me say: \u201cI told you so.\u201d I\u2019m not like that, my position is to help plan sponsors out as much as I can at an affordable price. This plan trustee would rather pay three times as much in legal fees because of a grudge. People who make bad choices usually consistently make bad choices.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" I used to spend much time trying to explain irrational behavior through rational thought and it\u2019s really impossible. If you\u2019re a plan provider, don\u2019t waste your time doing that. There are some plan sponsors out there that would rather cut … Continue reading