The audit elimination and fiduciary outsourcing present a truly attention-getting sales story to attract prospective customers and offer a new benefit to existing clients.
The outsourcing of fund monitoring removes low-profit, high-liability duties so advisors can focus on the services that set them apart.
For non-fiduciary advisors, the MEP removes the need for the advisor and their broker-dealer/RIA to be named as ERISA fiduciaries.
Being the one to introduce the MEP concept helps lock out competing advisors.
Because the MEP assumes the plan fiduciary role, the advisor is free to pursue participant rollover opportunities without conflicts.
Advisors should seek to understand this plan structure and its emerging providers in order to offer sound guidance. Multiple Employer Plans can provide a valuable tool for 401(k) advisors and offer high profile benefits for many of their current and prospective customers.
W. Michael Montgomery, AIF, CFS, CLU, TGPC, is managing principal of Montgomery Retirement Plan Advisors. This article previously was published in the DCPI Newsletter www.dcpinstitute.com.