The 3 Types of Retirement Specialists and When You Should Be Working With Each

You don’t have to look too far out into the media or internet to know that Americans have an issue saving for retirement. Facts, figures, and statistics plague our everyday lives about how the average baby boomer has painfully accepted they may have to work forever, or how millennials would rather spend money on avocado toast than contribute to an IRA. For those people who do have access to a retirement savings vehicle, a recent study by Bloomberg found that only 32% actively contribute to them.

This brings me to the point: Retirement is scary, running out of money in retirement is even scarier, and accepting that retirement may never happen is sad.

How can a retirement plan advisor help with this? When you work with an advisor who specializes in the retirement process and retirement plans, you should typically expect a higher level of care, knowledge and guidance. You can go to your primary care physician and tell them that your vision seems to be getting worse, but they will just give you a vision test, confirm your assumptions, and send you out the door with a referral to an optometrist. The optometrist will study your eyes, figure out if you’re near or farsighted, go over options for care, and recommend things that will help remedy your vision blurriness. You can go to any financial professional and get advice on retirement planning; often you’ll hear the 4% rule or that you need to save 10 times your ending annual income for a secure retirement, but they probably will not be able to help you actually get down the road, just give you the directions to where you should be going.

An advisor who specializes in retirement at both a plan and individual level is arguably the most beneficial thing to a retirement plan. They can assist you in deciding what kind of plan is right for your business, a 401(k), 403(b) or profit-sharing, just to name a few. These advisors can provide objective, high quality education for your plans’ participants which is one of the fasting growing requests plan sponsors have of their advisor, hopefully incentivizing them to start saving for their own retirement. A seasoned advisor can explain how to maximize contributions and potential benefits for business owners, reduce liability by working transparently to disclose fees and keep them low.

Without getting too deep into the legal aspects of a plan sponsors or plan advisors fiduciary responsibility, we will look at the three most common types of plan advisors.

1) The Plan Advisor

This professional may or may not specialize in the retirement space. They often can receive additional compensation from providers or fund companies for using their services. They have no fiduciary liability to you or your plan.

2) 3(21) Plan Advisor

Bound by ERISA (Employment Retirement Income Security Act), this advisor acts in capacity with the plan sponsor as a co-fiduciary to the plan. These advisors are held to a higher level of care and are required to keep the best interests of the plan and participants in mind when giving advice. Advisors acting in this capacity tend to be more plan driven and have more experience in the retirement space. However, the plan sponsor will hold the ultimate responsibility for decisions.


3) 3(38) Plan Advsior

Again, regulated by ERISA a 3(38), this advisor carries the highest level of responsibility and can take on almost all of the fiduciary responsibilities that come with operating a retirement plan. They take charge of all investment decisions, the majority of plan design and operation, participant education, and the like. They are often compensated through a percentage of plan assets, a price per participant, or through a flat fee. The latter typically applies to larger plans.


While it is important to vet any person that will be helping you in operating your retirement plan and considering professional experience, track-records, along with level and quality of service, the question of “How can you help me create a better plan experience?” is rarely asked enough. All answers are important and should be weighed according to your needs. Oftentimes hearing that investment performance can be improved or fees lowered is what makes an inexperienced plan sponsor jump on board; this is only a small piece of the puzzle. Investment performance doesn’t matter nearly as much if only 3 of your 25 employees are eligible and enrolled in the plan, or if your average deferral rate is 2.3%.

That’s how Plancheckr can step in and assist the process. While we are open to use by any advisor in the retirement space, those with minimal liability are less likely to be interested in the product because they’re not on the hook for anything. Plancheckr can help you connect with your advisor and keep both of you on the right track to Department of Labor compliance. With a proven workflow starting from plan design and creation, to quarterly updates and annual monitoring, Plancheckr makes sure that your trail of documents is in line with what the DOL wants and you need to keep your plan active, engaged and adaptable.

So here is the million dollar question, does your advisor use Plancheckr?

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