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Plan Provider Evaluation
NOT ALL PROVIDERS ARE CREATED EQUAL
Townsend Financial Life Management works with the plan sponsors to help select providers who can support the type of plan and meet the goals of the company and participants. Plan providers, include plan administrators, record keepers, TPAs, etc., to be evaluated on their ability. They are responsible for delivering participant support, plan sponsor support, technology, and fee management to both participants and the company.
After an evaluation of the plan design considerations is completed, Townsend Financial Life Management helps find a 401(k) plan provider able to deliver services aligned to the needs of the plan and the participants. The plan evaluation will include:
• Assess the Plan's Investments.
• Review the plan's overall mission.
• Conduct a strategy analysis.
• Check the plan's investment policy statement.
• Review the plan's mutual fund offerings and how they are selected.
• Monitoring of the plan's ongoing performance.
• Assess the Plan's Administration.
Townsend Financial Life Management's recommendations are not biased by proprietary offerings or compensation.
Evaluating Plan Fees
Fee transparency and amounts paid have come into the spotlight lately. In the past, many of the fees were embedded within “wrap fees” or “revenue sharing”. Getting to the bottom of exactly how much is being paid and to who can be a difficult task depending on how the plan was structured. This led many participants and even some sponsors to believe they were getting their 401(k) plan for free. This is obviously not the case because the provider needs to get paid for their services. Townsend Financial Life Management helps evaluate providers on their transparency of fees to help the participants and sponsors know how much they are paying and who they are paying it to.
The amount of the fee being paid for the service provided is also evaluated. This means that the lowest cost provider may not be recommended if the provider is not able to support the plan or provide the features the plan needs. Townsend Financial Life Management believes any fee paid without the services being provided in return is too high.