Free Advice

From time to time, we have conversations with clients and prospective clients about unsolicited contact from someone informing them that their retirement plan has a deficiency. Sometimes solicitors suggest that the deficiency rises to the level of a breach of fiduciary duty. Worse, some solicitors have suggested the deficiency may make the plan sponsor’s retirement plan committee members personally liable.

If you are a plan sponsor who has received this kind of communication, you know how disconcerting it can be, but Highland can help. Let’s consider how to interpret advice that can be unnecessarily alarming. 

Consider the Source

Most of these disconcerting messages are prospecting efforts from someone who has accessed aggregated data from the Department of Labor or a similar database source. Not all of this information is timely. In fact, quite often it’s stale, lacks proper review for comparability and can be inaccurate. More specifically, it lacks details important for this type of assessment, including actual data, fee information, investment lineups and up-to-date plan statistics.

In one case, a plan sponsor was presented “scores” on rates of return, participant contributions and fees, all of which were flagged as falling below industry averages. After Highland was asked to review the scores, it became clear that the so-called deficiencies were groundless. Fees, contributions and participant levels were improperly recorded, compared and scored. Bad data resulted in faulty advice and needless alarm. Thankfully in this case, the free advice offered was not acted upon and did not prove to be expensive and alarming.

What You Know and Can Count On

It’s a pleasure to review the facts with clients anytime they call and illustrate how Highland’s time-tested processes help them fulfill their fiduciary duties. Here’s what Highland clients can count on:

  • Regular Reviews. Highland’s process includes quarterly reviews (and more often as needed), to discuss the plan, its mechanics and investments.  
  • Investment Policy Statement. We regularly review and assist our clients with updating the plan IPS with each of our clients to ensure adherence to its provisions and to meet fiduciary responsibilities.
  • Fee Benchmarking. Reviews and comparisons of plan fees are conducted at least annually. Clients know the actual cost of running the plan. Highland also helps negotiate fees and we document cost comparisons for fiduciary purposes and participant benefit.
  • Investment Lineups. Plan investment options are researched on both a quantitative and qualitative basis. We evaluate fees to ensure they are competitive from a fiduciary perspective and to provide participants’ best net results.
  • Plan Design. Routinely, we meet with clients to assess participant demographics and investment behavior and to consider how well the plan is achieving the plan sponsor’s goals and objectives.

Call on Highland

While we regret the alarm that ill-informed solicitations can cause our clients, we always appreciate the opportunity to demonstrate the value of our firm’s consulting processes and our investor advocacy that puts our clients’ interests first.

Highland Consulting Associates, Inc. was founded in 1993 by a small group of associates convinced that companies and individuals could be better served with integrity, impartiality, and stewardship. Today, Highland is 100% owned by a team of owner-associates galvanized around this promise: As your Investor Advocates®, we are Client First. Every Opportunity. Every Interaction.

Highland Consulting Associates, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer of solicitation for the sale or purchase of specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

Kelly O'Hara, CEBS, RPA