In a world in the not too distant past, businesses of all shapesand sizes went to a single vendor for retirement plan services.

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This vendor offered all the plan design elements,advised on investments, and kept trackof all employee data. Long before “Madoff” the more sophisticatedplan sponsors recognized the inherent liability of relying on onlyone source for all retirement plan services.

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Read: Broker-dealer advisors at historiccrossroads

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Corporations that could afford to brought some of these servicesin house. Others began delegating services to individualvendors.

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Today, it’s very rare to see a company with, say, more than 100employees, limit themselves to a single bundled serviceprovider.

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The same cannot be said for small companies.

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There exists an often confusing array of retirement plan choicesfor small business owners (see “Retirement Plan Options for Small BusinessOwners,” FiduciaryNews.com, March 1, 2016).

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Read: Where DOL fiduciary rule standsnow

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As you might expect from any extremely busy person, theopportunity to reduce the amount of time and energy devoted tomaking decisions represents an attractive lure for this particularclass of plan sponsors.

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Not only do bundled service providers have a shot at thismarket, but, as of now, this is their primary market. Largecompanies cannot afford the increased liability that comes from thelack of a “second opinion” and functional redundancy presented byhiring a single bundled provider.

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Smaller businesses, on the other hand, cannot afford the cost inboth time and money generally associated with operating under abest practices model that avoids the worst of and most damagingconflicts-of-interest.

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Ironically, it is this desire to cut corners – and thewillingness of certain business models within the retirement planindustry to accommodate these unwise short-cuts – that has placedincreasing competitive pressure on those service providers who seethe ethical high ground in separate different plan duties.

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This is why, for all its short-comings (and there are plenty),the DOL’s new Fiduciary Rule may end upbeing worth the cost it will bring.

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By specifically eliminating conflicts-of-interest (that is,after all, its rebranded name), the DOL effectively ends thepotential problem with one-stop shopping.

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The DOL could go one step further and prohibit all investmentadvisers from offering the legal and tax advice necessary to makethe decision regarding how to establish a retirement plan.

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Leave that to the ERISA attorneys and the CPAs. Likewise, theDOL could then prohibit lawyers and accountants from havinganything to do with the provision of investment advice. In asimilar vein, let the recordkeepers alone to be the recordkeepers,but don’t permit them to enter the world of tax, legal, andinvestment advising.

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Read: DOL says insurance industry exaggeratesimpact of fiduciary rule

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It is well understood that tax considerations represent theprimary impetus for the adoption of a retirement plan, especiallywhen it comes to small business owners.

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Indeed, although a retirement plan is usually a form of a legaltrust document, even attorneys recognize the prominence ofaccountants regarding the decision and analysis of determining themost appropriate retirement savings vehicle.

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Benjamin L. Grosz, a tax and benefits attorney at Ivins,Phillips & Barker in Washington, DC, says, “I’d recommend thata business owner discuss with their tax professional (and benefitsprofessional, if applicable) before pursuing.”

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The multi-vendor approach is not limited to lawyers. Investmentadvisers, too, see the need for plan sponsors to begin their searchof the right retirement plan with the accountant. Charles J.Stevens, Jr., Principal at Evergreen Financial, LLC in Plymouth,Massachusetts, recommends small business owners “ask forsuggestions and referrals from their CPA,” stressing the plansponsor must “look for a vendor that’s not beholden to a specificproduct or company or provider.”

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In short, the retirement plan industry has been moving away fromthe one-stop shopping model for some time now. The DOL’s newConflict-of-Interest (aka “Fiduciary”) Rule might just finally killthat model for good.

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).