Benefits of consolidating vendors
Its antiquated products, high fees, restrictions and surrender penalties should soon be a thing of the past.
Like any other product or service in a capitalist marketplace, ERISA has guided the 401(k) world into an open and transparent system in which vendors competitively bid for business based on the merits of their organizations and price structure.
The retirement industry as a whole has largely neglected the small- to mid-market governmental 457(b), 403(b) and other non-ERISA plans.
Now is an opportune time to shift our attention to these underserved segments of this market.
The vendor may even assist you plan for your deliveries, ensuring that you constantly have all the materials that you need for manufacturing your products.
In most cases, it is not easy to locate one vendor who meets all your requirements.
We in the retirement plan industry should take with the utmost seriousness our duty to adhere to our oath as fiduciaries.
Perhaps the biggest benefit of consolidating the products is that negotiations can address the entire asset, rather than prepackaged bundles.
In a hypothetical scenario of an organization with 10 vendors, each with a proportionate share of a million asset, the purchasing power of each block would be .5 million.