The adage, “Don't put all your eggs in one basket,” rings truein business. So, what is keeping you from expanding your businessbeyond health and welfare benefits and offering 401(k) products toyour clients?

You've already built strong relationships with key executiveswho select worksite benefits providers for their companies. But onthe other hand, you might not consider yourself enough of aninvestment or ERISA expert to feel confident.

If that's what's keeping you from entering the 401(k) market,you might not be familiar with the latest product enhancements madeby some providers. If you've shied away from 401(k) sales in thepast, there's good reason for you to reconsider. Many of theseenhancements are specifically designed to simplify the 401(k)product by providing co-fiduciary support services. So, the planadvisor doesn't need to be an investment or ERISA expert.

Let's just say, these aren't your parents' 401(k) plans.

The fiduciary elephant

Let's address the elephant in the room. ERISA's myriad ofrequirements and corresponding fiduciary status have scared awaymore than a few benefits brokers over the years.

Twenty, 10 – or even five years ago, I would have agreed that adeep understanding of ERISA was a baseline requirement essential tosell 401(k) plans. Today, that's no longer the case if you workwith the right provider.

Lately, several 401(k) providers have developed turnkey productofferings that perform many of the ERISA-required fiduciaryfunctions. In other words, as the plan advisor, a deepunderstanding of ERISA is less important as long as you help yourclient:

• Choose a 401(k) provider who will perform these functions

• Monitor and document the 401(k) provider's activities as theyrelate to fiduciary duties.

A quick understanding of ERISA

You're probably asking how is a quick understanding evenpossible? In the context of ERISA, a plan fiduciary must act as a“prudent 401(k) expert,” making informed decisions in the bestinterest of all affected employees. While this might sounddaunting, meeting the “prudent 401(k) expert” standard can beachieved by hiring people who have the expertise. The misleadingpart is in the definition and the use of the word “prudent” or the“duty to act prudently.” “Prudence,” as it relates to ERISA,focuses on the process of making fiduciary decisions, not theresults of that decision.

ERISA acknowledges that it's not reasonable to expect a businessowner to possess the professional knowledge necessary to make every401(k)-related decision. ERISA allows for a 401(k) fiduciary (forexample, the employer) to outsource these duties to a third party.When outsourcing fiduciary duties, the crucial act is to documentdecisions and the criteria used for making the decisions. It isimportant to note that an employer who has overall responsibilityfor a 401(k) plan cannot completely bypass its fiduciaryresponsibility. Rather, the fiduciary can outsource the day-to-dayactivities and, instead, focus solely on the monitoring of thethird party.

Selecting the right provider

Many 401(k) product offerings have included investment-relatedservices to allow an employer to transfer some or all of thefiduciary exposure related to selecting the plan's investmentofferings. These services arise under either ERISA Section 3(21),where a fiduciary adviser provides recommendations to the employer,or ERISA Section 3(38), where the fiduciary advisor has completeresponsibility to select the plan's investment line-up.

More recently, a few 401(k) providers have expanded theirproduct offering to include fiduciary administrative services. Thenew services, arising under ERISA Section 3(16), shift theresponsibility of performing certain required duties from theemployer to the 401(k) provider. These administrative dutiesinclude the distribution of participant notices and processing ofplan distributions, e.g. hardship withdrawals and loans.

When selecting the right 401(k) provider to perform fiduciaryinvestment or administrative duties, there are two key questions abenefits broker should keep top-of-mind:

1. Does the 401(k) provider offer transparency by making it easyfor you to help the employer monitor and document the provider'sactivities?

2. Is the 401(k) provider willing to stand behind its fiduciarycommitment by accepting financial liability in the case oferror?

Adding value and diversity to your business

If partnering with the right 401(k) provider can help coverERISA investment and administrative issues, think of the value youcan bring to your clients as employers and plan fiduciaries. It'sthe same value that you bring them today in selecting the besthealthcare and worksite benefits for their employee demographic.Think of it this way – 401(k) plans are just another form of groupemployee benefits. So, there's a natural synergy with your businessmodel. You're their trusted advisor who can perform the requireddue diligence to help them select and monitor the right 401(k)provider.

More importantly, if employee education and support is a strongpart of your current value proposition as a benefits broker, youcan play an invaluable role in helping your client's employeesmaximize the benefits of their 401(k) plan. The best designed andadministered 401(k) plan is worthless without high participationrates, strong salary deferral rates and properly diversified assetallocation. Your expertise in working with employees, combined withthe 401(k) provider's education tools and support can be anextremely effective combination.

Whether its pressure relating to your benefits business or yourdesire to enhance and grow your business, now is the perfect timeto give another thought to selling 401(k) plans. You can start byfinding a 401(k) provider who will take the time to help you betterunderstand how the provider's product can work within your businessmodel. You won't just be helping your own business's bottom line.You'll be simplifying your clients' lives and reducing theirfiduciary liability – all while helping their workforce becomebetter prepared for a long and enjoyable retirement.