Vestwell's surveys found retirementplan sponsors are far more concerned with their own problemsvis-à-vis fiduciary risk and administrative burden than they arewith employee engagement. (Photo: Shutterstock)

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Advisors and sponsors have some common priorities in theretirement planning industry, with reducing fiduciary risk andcutting the administrative burden at the top of the list.

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So finds a survey from Vestwell of key sentiments of advisors and plan sponsors as they relate to selling,adopting, and maintaining plans.

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Among the survey's findings is advisors' biggest prioritybetween now and the end of the year: growing their client base,according to 57 percent of respondents.

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But nearly 30 percent say they're having a tough time findingnew opportunities. Other issues that make it difficult for them toreach this year's goals include displacing incumbents (25 percent)and managing scale (23 percent).

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When considering plan sponsors, more than 35 percent of advisorssay that the biggest mistake sponsors make is not understandingwhat they're paying for when it comes to their retirementplans.

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In addition, more than 97 percent are focused on cuttingclients' administrative burden—100 percent of sponsors, for theirpart, said that was important to them—and just under 97 percent ofadvisors also emphasize the importance of minimizing their clients'fiduciary risk.

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And 96 percent of advisors say that saving sponsors money onplans is also of major importance.

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Sponsors do have specific pain points when administering aretirement plan: 37 percent say filings, taxes, and complianceactivities are their biggest headaches.

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But even more—a whopping 98 percent—found being competitivelypriced, offering flexible investment options, maximizing their taxbenefits and minimizing fiduciary risk important.

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Says the report, “One may think that when it comes to offering aretirement plan, saving sponsors money and maximizing tax benefitswould be an advisors' top selling points. However, likely stemmingfrom the traditionally cumbersome and confusing aspects of 401(k)s,advisors view minimizing fiduciary risk and administrative burdenas even more important factors in helping clients select aretirement plan.”

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Interestingly, when it comes to increasing employee engagement,that's actually pretty far down sponsors' list when it comes to howimportant it is in choosing a plan platform. Sponsors are far more concerned with their ownproblems vis-à-vis fiduciary risk and administrative burden thanthey are with getting employees involved.

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One respondent warned that advisors “need to engage theirclients in conversations based on needs rather than selling plansbased off perception.”

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Sponsors are also less worried about fiduciary responsibility than they should be,according to the survey. “In today's litigious environment, it'scritical that advisors educate clients on their fiduciaryobligations,” warns Allison Brecher, general counsel, Vestwell, inthe report.

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Brecher adds, “Even by naming a fiduciary other than themselves,plan sponsors do not offload risk in its entirety…but it's still aneffective way to mitigate exposure and avoid costly mistakes.”

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