Most plan sponsors feel that they are meeting all of their fiduciary responsibilities. Overall, 71% say they took no specific action over the past year to increase their diligence due to recent scandals, and they are not planning any action over the coming year to ensure their plan is fully meeting its fiduciary obligations, per a Spectrem Group Perspective™, Fiduciary Services: Do Plan Sponsors Care? Among the remainder, the most frequently mentioned action was an audit or review of the plan. Two-thirds of those conducting a review of the plan handled that process in-house. Other actions mentioned included replacing the plan provider, conducting employee meetings and proactively seeking to stay informed and up-to-date on the issue.

Looking at how fiduciary issues are handled on an ongoing basis produces the same picture as presented above – a sizable minority (36%) of plan sponsors appears to spend little time on fiduciary issues. Fifty-seven percent of sponsors say they have a schedule for formally reviewing the fiduciary aspects of their plan quarterly, semi-annually, or annually. The remainder includes 36% who do a review only “as needed” and 7% focus on fiduciary issues only when hiring a new plan provider. Sponsors of plans with fewer than 100 participants are somewhat more likely to take the “as needed” approach.

These results appear to present both an opportunity and a challenge for plan providers. The opportunity arises from the fact that 20% of plan sponsors say they would be willing to pay an additional fee for advice and guidance on fiduciary issues. Whether this is presented in the form of a stand-alone advisory/consulting service or bundled with the assumption of some fiduciary liability, there is a market opportunity.

The challenge is to educate the one-third of sponsors who do not appear to place any great importance on their fiduciary responsibilities. As these sponsors are brought up the learning curve they too will become potential customers for additional advisory services. Differentiating your services by emphasizing that you provide fiduciary services will not result in additional sales. Banks have tried to differentiate this way for years with limited success. Plus, as noted, most plan sponsors simply are not concerned about these issues.

At the same time, educating plan sponsors about these duties and obligations may strengthen your relationship and result in a “value added” service. Perhaps all providers, as banks now do, can someday charge for these services – once uneducated plan sponsors become increasingly aware of potential liabilities. Even if they cannot, heightening your fiduciary services will result in greater protection for both your plan sponsors as well as your own organization.

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