Advisor Connect

Aligning Plan Design with Client Goals

Most of us live in homes that were not custom-designed for us. We adapt to them rather than expect them to be optimized to how we like to live. Most retirement plans are sold the same way. Companies buy something off the shelf that was intended for a generic audience, but not necessarily ideally suited for them. The irony is that while these plans are sold as cost-efficient, they often wind up costing their buyers a great deal in the long run because of lost tax savings or retirement savings since they're not optimized to their particular situation.

Aligning retirement plan design with a client's goals means to listen and assess what their true goals are and then present a range of ideas that can best deliver what they need. Plan designs can vary in important ways. For example, depending on the plan: contributions can be discretionary or mandatory. They can favor older employees over younger ones. They can accumulate a balance like a 401k or a promised benefit as in defined benefit plan. They can have modest limits on contributions or can go up to multiple six figures in DB and cash balance plans.

The key driver here is that unless a client is simply focused on the least expensive way to offer any sort of 'retirement benefit,' then it warrants spending the time and effort to help them understand their choices and reaffirm the quality of relying on experts like us. If we don't, we run the risk of failing to meet their goals and wind up leaving the door wide open to competitors. Let's work together to keep that door closed.


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