A clear view of vendors, duties, costs, and performance can be the difference between a "well-oiled machine and one that constantly in need of repairs. Every retirement plan must have the aforementioned players: Custodian, Record Keeper, Compliance (Third Party Administrator), and Investment Advisor. Most larger plan offerings are "Bundled" ( One-Stop Shopping). Whereas, the small-mid size sector is evenly split between "Bundled" and "Unbundled" (Multiple Unaffiliated Vendors). The above services can be provided by insurance groups, mutual fund houses, payroll companies, brokerage firms, banks, third party administrators, accounting practices,independent record keepers, and ERISA approved custodians.
The real questions when it comes to these vendors are:
Unfortunately, the retirement plan industry has made it extremely difficult for a plan sponsor to obtain answers to the above questions. The practice of "Netting Fees Against Performance" allows the vast majority of programs to make their charges "invisible" by taking them from the "gross returns" of the investment vehicles. For example, my S&P 500 Index mutual fund had a stated return of 15% last year. However, because of plan fees of 2.5%, my "real return" was 12.5%! This is the standard practice in the 401(k)/403(b)/457 universe. The only effective way to determine acceptable pricing/performance is to "break-out" each service and their fees. The "Unbundled" approach allows for easy replacement of defective "parts." The "Bundled" chassis may make it necessary to either switch within their offerings or completely move the plan.
The Prizant Group, Ltd. has extensive experience and knowledge of the inner workings of all the major players in the market place. We know the strengths and weaknesses of all the vendors and how they price their products. Depending on the needs of the plan sponsor, The Prizant Group, Ltd. will be able to bring together a high-performance, cost-effective core and provide continuing support to insure a positive experience. If the client prefers "local" providers, we will seek out the best fit and monitor them.
The Prizant Group, Ltd. researches the current vendors for the clients, interviews, company personnel to determine level of satisfaction, and runs "price comparisons" based on assets, complexity of plan design, service demands, and educational needs. Our overriding mission is to make absolutely sure that our clients are treated royally.
Securities and investment advice offered through Investment Planners, Inc. (Member FINRA/SIPC) and IPI Wealth Management, Inc., 226 W. Eldorado St., Decatur, IL 62522. 217-425-6340.
The Prizant Group Ltd. is independently owned/operated and is not affiliated with Investment Planners,Inc. or IPI Wealth Management, Inc. You cannot invest directly into an Index. Returns represent past performance and are not a guarantee of future results. Check the background of this investment professional: http://brokercheck.finra.org/Firm/Summary/18557