Traditionally 401(k) or 403(b) consultants receive commissions or charge fees based on a percentage of the assets in a retirement plan, regardless of type or quantity of services delivered. These percentage-based fees are usual, customary and fairly consistent from advisor-to-advisor and vendor-to-vendor.
When we launched Six8 we decided to ignore tradition, challenge paradigms and use common sense whenever possible. After an extensive review of retirement plan services, advice and fees, we arrived at a simple conclusion; it makes more sense to price our services based on what we do for our clients, the liability we assume, and the advice we give rather than an arbitrary percentage of plan assets. The result is what we call Activity-based Pricing.
Activity-based Pricing is a fee model that allows us to quote a fee based on the work we do for you and your employees. Each prospective client of Six8 Advisors receives a proposal based on three areas of practice: plan consulting, participant engagement and our Advice@Work one-on-one advisory program. We then have a conversation about the scope of work, and customize our advisory services and fees to each client’s program and budget. A key benefit of this approach is that the overall cost to your plan is based on actions, not just assets.
As a business owner and employer, you should ask yourself what is in the best interest of my employees and my plan.
- Does my advisor get paid for the size of their work or the size of my plan?
- What would it look like to work with a fee-based, fiduciary advisor versus a commissioned sales representative?
- Should you engage a retirement plan specialist over financial generalist?
Now is a perfect time to challenge the status quo. After all, plan sponsors are responsible for their retirement plan and must ensure that fees are “reasonable”. What better way to defend plan expenses than to have a list of activities and services provided to your plan.
Let us help you review your plan, compare your fees and show you what we can do for you and your employees.