Offering employees access to a 401(k) retirement-savings plan is critical to attract and retain top talent. Equally crucial are the steps you must take as plan sponsor to comply with a host of legal and financial responsibilities in the administration and ongoing management of those plans. By working with experienced financial advisory teams, employers can ease the burden of navigating a maze of ever-changing regulations while providing employees with the advice they need to maximize their retirement readiness.
Managing a 401(k) plan is not a one-time, set-it-and-forget-it activity. It requires constant care and attention to ensure that the plan and its investment options continuously meet the needs of your business and your growing workforce. It also demands that employers uphold their fiduciary duties to operate the plan solely in the best interests of the plan participants. This includes acting prudently to follow plan documents, maintain accurate records, ensure the appropriateness of investments and reasonableness of plan expenses, maintain transparency with plan participants and minimize risks of losses. Considering all the complexities that can come with 401(k) plans, fiduciary responsibilities also include the duty to educate plan participants and help them improve their long-term financial wellness.
Increasingly, employers are engaging third-party advisors to handle their defined-contribution plans’ administrative responsibilities and assist in meeting their fiduciary obligations to plan participants. These professionals can include registered investment advisors, certified financial planners and broker-dealers with the expertise and resources needed to keep the plan in compliance with government regulations. Equally important, professional plan advisors can work directly with your employees to help them understand how the plan works and make informed decisions to meet their current financial needs and longer-term retirement savings goals. This guidance is an invaluable benefit that empowers your workforce and makes them feel valued, which can subsequently improve participation rates, reduce plan fees based on a percentage of total assets under management, and lower overall plan costs.
As a note of caution, employers must understand that the ultimate fiduciary responsibility of managing an employee 401(k) plan lies with them and not with the advisors they hire. While the advisor can limit employers’ liabilities, the employer has the final say in the plan’s design and grants the advisor full discretion to select, change and monitor investment options.
When assessing a professional financial advisor to manage your employees’ 401(k) plan, ask the following questions:
- What services do you provide to help businesses meet Department of Labor and ERISA compliance requirements?
- What level of fiduciary responsibilities and liabilities do your services cover?
- How often do you meet with plan sponsors?
- How often do you review fund manager fees, investment policy statements and the alignment of investments to the IPS?
- What processes do you have in place to ensure investment fees are “reasonable”?
- What support services do you provide to help us educate employees and improve plan participation?
Are there instances when you would bring in a third-party administrator (TPA)? If yes, what are the additional fees for those services?
About the Author: Danielle Keyes is a retirement plan consultant with Provenance Wealth Advisor (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. She can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or info@provwealth.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Danielle Keyes is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC. Investment Advisory Services are offered through Provenance Wealth Advisors, LLC, an SEC-registered investment adviser.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Before making any investment decision, please consult with your financial advisor about your individual situation.
Every investor’s situation is unique. You should consider your investment goals, risk tolerance and time horizon before making any investment or withdrawal decision. Investing involves risk, and you may incur a profit or loss regardless of the strategy selected.
401(k) plans are long-term retirement savings vehicles. Withdrawals of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken before age 59½, may be subject to a 10 percent federal tax penalty. Investing involves risk. Investors may incur a profit or loss regardless of the strategy or strategies employed. Future investment performance cannot be guaranteed. Matching contributions from an employer may be subject to a vesting schedule. Please review your retirement plan documents or consult with a financial professional for more information.
Posted on September 16, 2025