{"id":3606,"date":"2018-07-12T11:45:21","date_gmt":"2018-07-12T15:45:21","guid":{"rendered":"http:\/\/therosenbaumlawfirm.com\/blog\/?p=3606"},"modified":"2018-07-12T11:45:21","modified_gmt":"2018-07-12T15:45:21","slug":"you-cant-be-everybody-for-everything","status":"publish","type":"post","link":"https:\/\/therosenbaumlawfirm.com\/blog\/?p=3606","title":{"rendered":"You can\u2019t be everybody for everything"},"content":{"rendered":"

I have written many articles on the fiduciary warranty and how that is a deceptive practice in my mind because plan sponsors assume that this warranty protects them a lot more than in the very limited circumstances that it actually does.<\/span><\/span><\/p>\n

When I first wrote an article about it in 2011, someone I know who worked for one of these fiduciary warranty pushing providers didn\u2019t take too kindly to my article and asked me to take his name off of my newsletter subscriber lists. He also indicated that in the past, he referred a lot of work to ERISA attorneys. I got the picture and of course, in the years that I knew him, I never got any legal work from that relationship. Regardless, when you are outspoken as I am about fee disclosure and some of the abuses in the retirement plan business, this is the price you have to pay for being outspoken. Most of the time, my outspokenness gets me more business like the time I was hired by a West Coast registered investment advisor because the competition (the top ERISA attorney in the country, in my opinion) was returning the client\u2019s phone calls from a meeting with a bundled provider client that was known for its poor product and high fees. The client knew that they didn\u2019t want to hire an ERISA attorney who represented providers like that. In the end, you can\u2019t be everything for everybody.<\/span><\/span><\/p>\n

As a plan provider, you have to develop your niche and market yourself to the marketplace you want to work with. A financial advisor, who only wants to work with $100 million plans, isn\u2019t going to join a small <\/span><\/span>business networking<\/span><\/span> group. A third party administrator (TPA) that only handles small, balance forward retirement plans isn\u2019t going to handle a $75 million, participant-directed 401(k) plan.<\/span><\/span><\/p>\n

Plan <\/span><\/span>providers<\/span><\/span> need to their strengths and weaknesses. I worked for a provider with an owner who thought we could do everything and when we tried to handle something out of our element, we\u2019d flop. As Dirty Harry said in Magnum Force: \u00a0\u201cA good man always knows his limitations.\u201d Plan providers need to market their strengths and not try to be a provider for every type of plan coming down the pike.<\/span><\/span><\/p>\n

The fact is that the retirement plan business is large enough for providers of all different sizes and shapes. There is enough area for the bundled provider and unbundled provider, as well as brokers and registered investment advisors. To me, it\u2019s all about fit. For some plans, bundled providers may be the solution and there are times when they are the completely wrong answer. Plan sponsors need to find the right team, the team with the background to handle a plan of their size and shape.<\/span><\/span><\/p>\n

Plan providers need to understand they can\u2019t be everything for everybody. Just like I won\u2019t be representing any companies pushing those fiduciary warranties.<\/span><\/span><\/p>\n

<\/span><\/p>","protected":false},"excerpt":{"rendered":"

I have written many articles on the fiduciary warranty and how that is a deceptive practice in my mind because plan sponsors assume that this warranty protects them a lot more than in the very limited circumstances that it actually … Continue reading →<\/span><\/a><\/p>\n

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