We are not alone at IAI in having competitors who undercut us in price; it comes with being a part of a well-functioning democracy. One particular challenge we face, though, is a general misunderstanding of what it is we do, and how services can vary among various providers in our field.
Some plan designs (such as a 401(k) plan with no employer contributions) are extremely straightforward, and there are a lot of TPA firms out there that can handle the administration of those plans equally well. Other plan designs (including virtually all defined benefit plans) are much more complex, though, and those plans need an experienced actuarial consultant, not just an administrator.
Here are a few ways that we differentiate ourselves from our competitors:
- Thoughtful plan design – Not all retirement plans are created equal. We take pride in our ability to listen to the objectives of the plan sponsor and then design a plan that best fits that particular situation. No trying to fit a square peg into a round hole, leaving objectives unmet. No unpleasant surprises between the promises of the plan design phase and the realization of the plan operation. And no plans with design flaws that push them outside the boundaries of IRS regulations, leaving the plan sponsor exposed to liability in the event of audit.
- Direct communication with experts – At some of our competitors, the sales force outnumbers the professional staff. Others have “client liaisons”, who work as go-betweens in communications with you and the person doing the administrative work. Still others purport to be defined benefit experts, but don’t even have credentialed actuaries on staff; they contract with outside “backroom” actuaries to do the calculations and sign off on the necessary government filings.
At IAI, your plan is assigned to a credentialed consultant (a credentialed actuary for a defined benefit plan), and that consultant is your primary contact. No games of “Telephone” that result in delays or garbled messages. You talk directly to the consultant who is familiar with both your plan and the intricate IRS rules and regulations governing it.
- Proactive consulting – Effectively managing a defined benefit plan is like navigating a large ship through dangerous waters: It takes skill, knowledge and effective communication among all crew members (financial advisors, CPAs, etc.), and poor navigation can result in truly bad consequences. At IAI, we pride ourselves in proactively consulting with our clients and their outside advisors to anticipate what’s ahead and avoid those rocky shoals.
- No hidden fees – Some of our competitors are able to quote low fees because they push you to invest the plan assets with a particular financial institution, and then receive kickbacks or other indirect compensation on those invested assets. Not at IAI; the “Independent” in our name means that we work independently from any financial institutions. You’re free to invest the plan assets anywhere you’d like. And if we do receive a payment from the financial institution, we credit that to your next invoice. This allows us to offer you clear, unbiased advice when it comes to funding your plan.
All this is not to say that there aren’t other good firms out there; we hold many of our competitors in high regard. But it’s truly not a commodity that we’re offering; it’s a professional service, and these services vary considerably. It’s like the difference between having a CPA who simply fills out your tax forms, and one who advises you on how you can reduce your tax liability.
Perhaps the thing that speaks best to the value of the service we provide is the fact that, over the last three years, we have taken over the administration of 56 retirement plans from other firms, usually because that other firm “dropped the ball” in some way, leading to unpleasant surprises or expensive fixes. In that same time period, we have lost fewer than a dozen plans to competitors.
Contact us at IAI if you’d like to learn more about how we can help you and your business achieve your retirement goals.