You might be wondering if you need a financial advisor for your 401(k).
Many employers, especially small business owners, are hard at work managing their own business and working closely with their customers or clients. A financial advisor can help you tackle the issues related to your 401(k).
Here are a few things a financial advisor can do:
- Provide employees with financial advice
2. Act as an investment manager
3. Share fiduciary responsibility
4. Help with plan design
Do I need a financial advisor?
Sometimes it’s hard for small business owners to understand what an advisor may be able to help them with. Apart from getting financial guidance, the following are some reasons why you need a financial advisor.
1. It’s Good For Your Business
Many employers, particularly small businesses, with limited time and resources, find the administrative and time-consuming 401(k) management unnerving. Financial advisors will help you avoid problems associated with 401(k) and give you peace of mind. This involves not only preventing you from getting penalized and fined, but also maintaining a plan’s qualified tax state.
Given that in the past decade, according to Lex Machina, there have been over 83,000 ERISA-related cases that have been filed under The Employee Retirement Income Security Act (ERISA) in federal courts. You don’t want to end up in court for penalties and fines.
Financial matters can be complex and complicated and often involving. An advisor can help you make sense of all the tasks involved and save you a lot of time, which you can spend making money.
Also, having a financial advisor for your employees and yourself whom you can seek financial and investment advice from, is critical for the success of your business. An advisor will ensure your plan is being utilized to the fullest and also that your employees are getting the most out of the benefits
2. Offers You Fiduciary Services
If you’re to reduce the liability associated with your 401(k) plan, hire a financial advisor to serve as a fiduciary. While not all financial advisors offer fiduciary services, any fiduciary has the legal responsibility to act in the best interest of your 401(k) plan.
3(21) fiduciaries share liability with you as the plan sponsor while a 3(38) fiduciaries take complete obligation for building and monitoring the fund lineup under ERISA.
Having a great financial advisor can help your 401(k) plan flourish. A financial advisor who: takes up fiduciary responsibility, offers administrative assistance, and is committed to making your employees experience with 401(k) worthwhile is worth your time and money.
Contact us today if you’re looking for a financial advisor who can entrust your business’s compliance, liability, and 401(k) administration.
Have more questions about retirement administration? Schedule a plan discussion with us or take 30 seconds to find which plan is best for your company with the retirement plan evaluator.