What Is a Plan Advisor?

What Is a Plan Advisor?

A plan advisor is a professional who helps employers make informed decisions regarding complex employee benefit matters. They are a type of financial adviser who might hold a variety of different job titles depending on their specializations, such as Retirement Plan Consultant or Health Benefits Advisor.

Not only does a plan advisor provide input on the formation of a plan strategy, but the right plan advisor is also willing to assist businesses with managing employee benefit plans on a day-to-day basis. For example, a large company will likely need a trusted expert to carry out retirement plan administration by actively matching employees to the right retirement benefits and recalibrating the plan as necessary.

As the plan sponsor, your business has certain obligations to uphold. This includes, for instance, fiduciary responsibility under the Employee Retirement Income Security Act (ERISA). A certified and experienced plan advisor will be exceptionally familiar with all of these responsibilities and the best ways to satisfy them.

Types of Plan Advisors

It is important to find a plan advisor who knows their niche inside and out. Working with a general-purpose plan advisor might seem like a reasonable way to mitigate seemingly unnecessary costs, but there is no replacement for a specialized professional who can give you peace of mind with their proven knowledge.

The different specializations of plan advisors based on plan type include:

• Retirement Plan Advisors: Focus on 401(k), 403(b), and other retirement planning services.
• Health Benefits Advisors: Assist with navigating health insurance options and plan design.
• Wellness Plan Advisors: Help develop and implement employee wellness programs.
• Flexible Benefits Advisors: Specialize in managing cafeteria plans and flexible spending accounts.

It is entirely common for employers to collaborate with multiple types of plan advisors at various stages of the employee benefits plan process. As the plan sponsor, your company's needs and goals are the priority. That is why it is important to find plan advisors who are willing and able to communicate and collaborate with other consultants as necessary.

Benefits of Working With a Plan Advisor

To fully understand what a plan advisor is, it is also necessary to know exactly how they can benefit your organization. The most notable benefits of working with a plan advisor are:

• Reduced Fiduciary Risk: Advisors can help mitigate liability associated with plan management. They accomplish this by acting as a plan fiduciary who leverages specialized knowledge for the sole benefit of plan participants and beneficiaries.
• Improved Plan Design: The right advisor has proven expertise in creating plans that meet business needs and employee preferences. They can oversee the creation of a defined contribution plan that satisfies both employee and employer.
• Cost Optimization: The advisor can play a role in negotiating fees with service providers and identifying cost-saving opportunities. Their experience and knowledge level the playing field in these complex discussions.
• Increased Employee Engagement: Advisors can help educate and engage employees with their benefit plans. Employees appreciate defined benefit plans, and the advisor can "market" these plans in a way that maximizes their appeal.
• Ongoing Compliance Support: The advisor provides ongoing assistance in ensuring plans comply with complex regulations. Retirement plan compliance, for example, requires filing regular reports with the IRS.

In addition to these benefits, working with a plan advisor can also be a guarantee of correctness. Omitting the plan advisor from any step of the benefits planning process introduces the risk of inaccuracies, missed opportunities, and compliance violations.

What to Look for in a Plan Advisor

Being fully aware of what a plan advisor is also entails knowing what to look for when attempting to hire a capable and reputable professional for the job. The first action you can take to assess a potential plan advisor is to look at their qualifications and experience. Check for relevant certifications in specific plan types, such as an accredited certificate for investment advisory services.

It is important to choose an advisor who understands and upholds fiduciary standards. If your organization aims to implement financial wellness programs for employees, as an example, then your advisor must be able to comply with regulations while fulfilling an obligation to employees in good faith.

Aside from moral traits, you should also look for a plan advisor who fits in with your company's circumstances and culture. Ask about fee structures and pricing to ensure a candidate's services fit into your budget. Conduct interviews to ensure that the advisor has a clear and consistent communication style. You might even test potential advisors on their ability to use relevant technology and resources needed for plan management.

How to Find a Plan Advisor

When looking for a plan advisor, local consulting firms can be a great place to start. Check user reviews and case studies to get the full picture of a firm's reliability, performance, and consulting style before proceeding. Professional referrals from trusted sources can be the best way to pinpoint the best firms or individual advisors for the job.

There are also professional associations, such as the National Association of Plan Advisors (NAPA) that exist specifically to help business leaders connect with top advisors in each specialization. Rely on these resources as much as necessary, or consider turning to online directories and review sites that aggregate the top choices along with reviews and ratings.

HUB International Helps You Protect Your Employee Benefit Plans

Informed business leaders understand what a plan advisor is and the value they can bring to a company. They reduce risk, help guarantee compliance, and improve employee satisfaction while keeping costs manageable for the employer. It is difficult to overstate the role that plan advisors play in optimizing employee benefit programs.

Even so, there is always a certain amount of risk that employers take on when building or expanding employee benefits programs. Unforeseen circumstances can lead to significant financial setbacks for the company. Contact us at HUB International to discuss your employee benefits options. You can also learn more about HUB’s retirement services here!