Perspectives : DC Retirement | November 09, 2022

How to hit your stride as a small-business retirement plan advisor

Updated August 29, 2024
Looking to grow your retirement business? Small-business retirement plans are in demand and pose an excellent opportunity for getting ahead.
Plan sponsors are looking for someone to advise them on a 401(k) plan for small businesses and guide them through a maze of regulatory updates and investment options. Through your relationship with plan sponsors, you also have the chance to provide much-needed support to participants—and ultimately give a boost to your wealth management business.

Pounding the pavement for plan sponsors

Retirement plan specialists can provide real value to plan sponsors—especially when it comes to helping them meet their most pressing challenges. From investment oversight, plan design recommendations, and regulatory compliance support to financial wellness programs and participant education, retirement plan specialists can help plan sponsors manage their workloads and reduce stress.
44 %
of plan sponsors choose to work with a finanical advisor.¹
49 %
 of plan sponsors rely on financial advisors when reviewing their investment lineups.¹

Who: Plan sponsors
What: Plans between $5M and $50M in assets
Why: Plan sponsors are looking for support with:

  • Annual investment reviews.
  • Rollover services.
  • Investment committee meetings.
  • Participant guidance.
  • Participant advice.
  • Fiduciary duties.
How: With the demand for fiduciary services expected to increase,* you can play a central and critical role in all aspects of the investment process.¹
*Demand for both 3(21) and 3(38) fiduciary services is trending upward compared with 2022, with 49% of plan sponsors open to working with a 3(21) and 43% considering a 3(38).

3(21) services
As the plan’s investment fiduciary, you’ll provide investment recommendations to the plan sponsor, who may accept or reject them. You’ll also execute the investment decisions for the plan. Ultimately, the plan sponsor retains decision-making authority for the investments and must monitor the performance of the 3(21) fiduciary.

3(38) services
As the plan’s investment manager, you’ll take responsibility for handling the investment lineup. You’ll also have the authority to make necessary changes by selecting, monitoring, removing, and replacing investment options. The plan sponsor is still responsible for monitoring the performance of the 3(38) fiduciary, subject to the terms of the plan document and its investment policy statement.

Coaching participants toward a successful retirement 

Everyday financial challenges can make it hard to save for retirement. Small-business retirement plan advisors, armed with the right tools and resources, can help participants take positive steps toward improving their financial wellness up to and through retirement. Focusing on behavioral coaching—in particular, helping participants stick to their long-term plan—is the greatest potential value you can add.
85 %
of plan sponsors have at least one type of investment advice offer for their participants.¹
52 %
of participants would want to speak with a financial professional if they needed help making a change to their finances.²
73% of employees name finances as their top cause of stress.³

Who: Participants
What: Retirement plan and financial education and resources
Why: Participants are looking for advisor guidance with:

  • Investment selections.
  • Saving for retirement.
  • Navigating Social Security.
  • Retirement income planning.
How: Using our tools, technology, and financial wellness resources, you can provide participants with the support they need to successfully chart their course toward retirement.

Achieving your personal best with the right fees

When choosing a retirement advisor, participants and their employers focus on two key factors: the quality of services provided and a competitive fee structure. Setting your fees is a critical component to consider when growing your book of business in the retirement planning space.²
How households prefer to pay for their advice2

Demonstrating your value for the long run

Beyond thinking through your fee structure, it’s also important to know the value you bring to clients—and be able to demonstrate it. To help you build long-term, trusted relationships with plan sponsors and participants, we developed Vanguard Advisor’s Alpha®. Here you’ll find resources and tools to create a value proposition around Vanguard Retirement Plan AccessTM that tells your clients you see them as people, not portfolios.
Ready to see how Vanguard can help you and your clients? Let's get in touch.
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1 Cogent Syndicated Retirement Planscape®, May 2024.
2 The Cerulli Report, U.S. Retirement End-Investor 2023.
3 Capital One CreditWise Survey, 2023.
Note: All investing is subject to risk, including the possible loss of the money you invest.