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What have you done for them lately?

Article originally posted on

About Tim Minard About the Author

By Tim Minard, Senior Vice President, the Principal Financial Group®

Before the new disclosure regulations took effect, financial professionals focused with renewed rigor on communicating their value propositions in order to demonstrate their worth to clients for fees paid.

For many, a best practice is to create a "Commitment of Service" document that lays out in detail every service you would provide to your clients. But now that initial disclosure has come and gone, and with the possibility that some plan sponsor clients could face DOL audits, it is important to be able to show what you have actually done to service the plan in the past year.

With increased scrutiny around the reasonableness of fees for services provided, this is a very good time to take a look back and document the services you provided. If by chance one of your clients should face an audit, a formal documented review of your services would be invaluable.

Here are some questions that may help:

  • How many times did you meet with the sponsor?
  • Did you go through all the 408(b)(2) disclosures received and help the plan sponsor understand each one?
  • Did you review goals for the plan with the employer?
  • Did you discuss any enhancements or new services being offered by service providers?
  • Did you lay out a timeline for the plan sponsor so they understand when certain items are due? Examples could include: non-discrimination test, Form 5500, or certain participant notices.
  • Have you helped them set up a process to document their fiduciary actions such as a fiduciary file?
  • How many on-site meetings did you hold with participants?
  • Can you show improvement in any of the plan metrics such as deferrals, average account balance or participation that may be a result of an education meeting or plan design change?

Of course this is only a partial list of the services you may be providing. If you aren't already taking this personal inventory, take the time now to document your good work and report it to the client at year's end.

It's always good to take a step back to help ensure that you are being as efficient as possible. If you haven't created a formal commitment of services document now would be a good time to do so for 2013. The document creates a guide for what you will do each year and a helpful tool for rating yourself at the end of the year on how well you achieved your planned tasks. As plan sponsors continue to closely evaluate the reasonableness of fees, the document is a tremendous reinforcement to your clients of the value you bring to them and the retirement plan.

Plan sponsors need just as much help now, if not more, in understanding all the nuances of retirement plans. The plan is one of their biggest expenditures for benefits. You play a key role in helping them know whether they are getting the most value for the money they invest.

Tell them what you're going to do for them. Do it. Then remind them of what you've done.

t12110801nq — 12/2012


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