The job is fiduciary, not just financial
Sponsoring a retirement plan makes the business a fiduciary under ERISA. That is a personal standard of care, and it applies to how investments are selected and monitored, how fees are evaluated, and how the plan is administered — whether or not anyone at the company has the expertise to do it.
An engaged plan advisor takes on a defined share of that responsibility in writing. The specific share depends on the engagement, and the distinction is worth understanding precisely.
- →A 3(21) investment adviser gives advice; the plan sponsor retains final decision authority and the associated liability.
- →A 3(38) investment manager takes discretion over the lineup, and formally accepts responsibility for those selections.
- →Neither arrangement eliminates the sponsor's duty to prudently select and monitor the advisor itself.
What the work looks like when it is happening
An advisor who is genuinely engaged produces a visible paper trail. If a year has passed with no documents, no meeting, and no questions, that is itself the finding.
- →A scheduled committee meeting with an agenda, materials sent in advance, and minutes retained afterward.
- →An investment policy statement that exists, is current, and is actually applied to the lineup.
- →Periodic fund reviews measured against the policy — including funds placed on watch and funds removed.
- →A fee benchmarking exercise, at a stated interval, comparing the plan against genuinely similar plans.
- →Participant education that reaches employees who are not already contributing — not only the ones who show up.
- →Proactive notice of regulatory changes that affect plan design, such as the SECURE 2.0 provisions.
The participant-side value nobody measures
Plan-level work is only half of it. The other half shows up in participant behavior: enrollment rates, deferral rates, how many employees are invested in something appropriate for their age, how many cash out when they leave.
These are the levers with the largest effect on whether employees actually retire, and they are the ones most improved by someone paying consistent attention. Automatic enrollment, automatic escalation, sensible defaults, and clear communication routinely move participation more than any investment decision does.
They also tend to be invisible on a fee disclosure, which is why advisory value is easy to underestimate right up until the plan has no advisor.
Reasonable questions to ask your current advisor
None of these are hostile. An engaged advisor will have ready answers, and the ones who do not tend to reveal that quickly.
- →What is your fiduciary status on this plan, in writing — 3(21) or 3(38)?
- →What did we pay you last year, in dollars, from all sources including indirect compensation?
- →When was our fee structure last benchmarked, and against what comparison group?
- →Which funds have been added, removed, or placed on watch since the plan started, and why?
- →What is our participation rate and average deferral rate, and how have they moved?
- →What would you change about this plan if the decision were yours?
When a change is worth considering
Advisor turnover is disruptive and should not be undertaken casually. But a few signals reliably indicate the relationship has gone dormant: no committee meeting in over a year, no documented fee review, an investment policy statement that cannot be located, or an inability to state compensation in dollars.
The public Form 5500 filing records service provider changes year over year in Schedule C. Repeated churn is worth understanding — as is a decade of no change at all combined with no evidence of ongoing work.