PLANADVISER - March/April 2022 - 13

client base they have. "
Such consolidation is, in turn, driving
greater efficiencies and lowering overhead
costs, putting even further pressure on
fees, Swallow says.
Greg Fiore, senior vice president at
OneDigital, says many advisers are
broadening the scope of their work
to both add value to the client and
potentially bring in more revenue. Those
advisers are leaning into their consultant
role, taking on plan management tasks
such as making sure the plan meets the
filing deadline, helping with plan design
strategy and conducting participant
educational meetings.
" Once you build that trust at the client
level and provide that kind of service, "
Fiore continues, " [clients] ask you to come
back and do other things such as look at
student loans, health savings accounts or
emergency savings. And that work can be
more contract-based, paying project fees. "
Swallow says advisers have plenty of
opportunities to expand their products and
services. He points to legacy institutional
consultants now supplying a participant
advice service. " Those firms see offering
wealth management to participants as a
way to generate additional fees. "
Moreover, advisers can generate
fees by providing guidance to clients
on new regulations such as the Setting
Every Community Up
for Retirement
Enhancement Act, which has provisions
that sponsors are still considering, and
possibly " SECURE 2.0, " aka the Securing
a Strong Retirement Act, which some
expect to pass Congress this year.
Advisers are also charging project
fees for specific, one-off services, such as
guiding a plan sponsor client through the
request for proposals process, reviewing
the client's plan documents or helping to
combine plans after a merger.
Those charges are on top of the retainer
fees most advisers still charge, as either a
percentage of assets under management or
a flat fee based on plan size.
In general, Fiore says, plan advisers
are moving away from commission-based
structures, as more plan sponsors express
a desire to hire fiduciaries.
Ellen Lander, principal in Renaissance
Benefit Advisors Group, says her firm
sticks to a flat-rate fee schedule, which
makes sense for all but the smallest plan
sponsors, a segment not in her client base.
" Adviser work is exponentially greater than
it used to be, " she explains. " That means
the amount of hours we need to spend just
doesn't relate to a percentage of assets. "
The glut of recent fee-related lawsuits
against plans has also prompted
additional
discussions
sponsors and their advisers on the role
fees play in their plans.
Nearly 150
between plan
Employee Retirement
Income Security Act excessive fee
lawsuits were filed over the past two
years, according to the Goodwin Procter
law firm, and more such suits are piling
up in 2022, those against PPL Corp. and
Mass Brigham General among them.
" That litigation has recentered the
discussion on fees and created quite a
bit more urgency for sponsors to look
at theirs, " Gardner says. " They need to
make sure that both the level of the fee
is reasonable and how it's being applied
is equitable. Participants are much more
aware of the fees they're paying than they
were five or six years ago. "
It is also important for advisers to monitor
such lawsuits to understand the tactics
attorneys are using to file suit against plan
sponsors, and then explain these trends
to committees. Those lawsuits essentially
offer a road map that committees can
follow to protect themselves from similar
cases, Gardner says.
Lander says continually evaluating
fees also makes sense as a plan evolves,
demographically and by asset size. She
reminds clients concerned about lawsuits
that reasonable " does not mean cheap, "
but, rather, fees should reflect the level
of service and expertise the plan sponsor
receives. Beyond that, she stresses the
importance of transparency regarding
which, if any, fees participants are paying.
-Beth Braverman
34% said fee
compression is the top
concern facing their
practice.
Source: 2020 PLANADVISER Practice
Benchmarking Survey
67% said their clients
pay on an asset-based
fee schedule.
Advisers, on
Fees, Services
And Concerns
74% said they offer
individual advice or
wealth services to clients.
planadviser.com March-April 2022 | 13
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PLANADVISER - March/April 2022

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