Financial Advisor for workplace retirement plan for small practice

[GUBBY]

I am looking for any recommendations on a firm or financial advisor for our workplace retirement plan. Close to 75 employees on plan. Have reviewed WCI list and reaching out but curious if anyone has recommendations. Planning on using Schwab platform and have record keeper and TPA in place already.

[litovskyassetmanagement]

I am looking for any recommendations on a firm or financial advisor for our workplace retirement plan. Close to 75 employees on plan. Have reviewed WCI list and reaching out but curious if anyone has recommendations. Planning on using Schwab platform and have record keeper and TPA in place already.

I'm curious why Schwab? We work with any record-keeper/TPA, including Schwab, however our preference is Vanguard/Ascensus. I actually never ended up wanting to use Schwab, given the option, due to their AUM fees and lack of more advanced on-demand participant advisory services (which I grant that not every plan might want to use). Medical practice plans are often asset-heavy, and participant-light which makes it ideal for record-keepers with fixed/flat fees. If for example participants want to use self-directed brokerage accounts, Schwab accounts are going to be available on the Ascensus platform around Q3 of 2023 (vs. currently offered TD ones), so that's probably the only advantage Schwab currently has over the likes of Ascensus. That said, it can sometimes work out that Schwab AUM fee is lower than Ascensus fixed fee if the assets are not very high.

[pit.alumni]

We use Schwab and have a custom plan drafted by our attorney and use an outside actuary/TPA. Schwab is simply the custodian and I don't believe they charge us any fees. Our practice pays the TPA and attorney separately, so the participants in essence have no fees. The accounts are self directed. Individual participants have the option of utilizing Schwab financial advice, for a fee, and some have also brought on outside advisors for their accounts. Many are do it yourself and use target date funds or low cost ETFs. Some trade individual stocks. It's their money and I think allowing them to manage it is the right thing to do. Schwab puts on yearly financial seminars for all participants where the emphasis is have a plan and execute. It's very well done and really emphasizes basic WCI principles.

[litovskyassetmanagement]

We use Schwab and have a custom plan drafted by our attorney and use an outside actuary/TPA. Schwab is simply the custodian and I don't believe they charge us any fees. Our practice pays the TPA and attorney separately, so the participants in essence have no fees. The accounts are self directed. Individual participants have the option of utilizing Schwab financial advice, for a fee, and some have also brought on outside advisors for their accounts. Many are do it yourself and use target date funds or low cost ETFs. Some trade individual stocks. It's their money and I think allowing them to manage it is the right thing to do. Schwab puts on yearly financial seminars for all participants where the emphasis is have a plan and execute. It's very well done and really emphasizes basic WCI principles.

There are several versions of Schwb platform - one is SDBA only where individuals have brokerage accounts (this is not the one OP is talking about, more than likely) and two is a record-keeping platform where a TPA does the record-keeping (and the TPA chooses where the record-keeper where participant accounts are opened, I'm guessing this is OP's chosen approach). These are the two I'm familiar with. The second version does not necessarily have SDBAs at all, these are participant-directed accounts with a fund menu. There is also a third version where Schwab does the administration, record-keeping and custody with no outside TPA (all done by Schwab in-house). This is the platform I'm not particularly thrilled about either as you can't use your own TPA. So if this is version 2, then I'm not thrilled about it either as the TPA has to do record-keeping, and the choice of low cost platforms for these plans are limited (they usually don't have SDBAs available or any participant education for that matter), not to mention that the cost of TPA admin, record-keeping plus Schwab custody can add up fast vs. alternatives. It might be less than Vanguard/Ascensus, but depending on assets/participants/services required, it is less than top notch, and only really smaller plans usually use this approach. Typically large plans use version 3 with Schwab doing everything, but if OP is using a TPA, then I'm guessing it is version 2 with a Relius-based record-keeper for participant accounts. This can work, but I still prefer higher quality record-keepers for practices with 75+ participants, all else being equal.

While it is possible to set up SDBA only plan at Schwab, this is a really bad idea all around if your practice has NHCEs. I've written about it here:

https://www.whitecoatinvestor.com/how-to-best-group-retirement-plan/

In short, these issues are a deal breaker if you have NHCE staff. For a group practice with doctors only this is perfectly fine though, so my comments below are for plans with NHCE staff:
1) SDBA only means NHCE participants are not getting the right participant education or plan features such as investment menu, managed portfolios or QDIA. There is no plan level participant advice option available for this, as it is with other record-keepers such as Vanguard/Ascensus.
2) Getting advice via SDBAs is the worst possible option for NHCE employees. It is great for doctors/partners who can hire the best advisers, but staff is left out in the cold with this one. It is definitely a violation of plan sponsor fiduciary duty to have SDBA-only plans if you have NHCE staff. They are certainly cheaper, but hiring Schwab advisers who do not act in a fiduciary capacity and who charge very hefty AUM fee is not a good option for NHCE staff. It is also plan sponsor's duty to monitor such advice when offered via SDBAs (as well as to monitor and benchmark fees). So it is another fiduciary headache if you have many NHCEs, and another reason to avoid SDBA-only plans.