RFP Advisor Search Potential Pitfalls

Many Plan Sponsors recently have looked to retirement plan professionals to provide a myriad of service deliverables to help provide
participants with a best in class experience and to implement best fiduciary practices. As we have seen from recent headlines (Wall
Street Journal - May 26, 2015 - http://blogs.wsj.com/totalreturn/2015/05/18/does-your-401k-use-high-cost-funds), the issues facing
Plan Sponsors are becoming more and more complicated with respect to:

plan design recordkeeping (fees and services)

fiduciary oversight Compliance
investment policy statement employee communication strategies
plan health, investment management documentation of Fiduciary file

As Plan Sponsors look for help, they are going to the advisor market to request data on advisors capabilities. This process seems
innocent, but it has many pitfalls if not done correctly. Unfortunately, there is a trend in the advisor industry now in responding to
advisor RFP's or RFI's where responses include data that is not accurate as it relates to an advisors specific practice or service
model. Advisors that are not part of the institutional retirement plan consultant community are now being asked by plan sponsors to
share a greater level of detail on their business and consulting practice. Many advisors in the wealth management space are now
using their broker/dealers (who serve as their back office) to complete RFP's because their lack of experience and staff dont
allow them to compete with the institutional retirement plan consulting space. This pitfall (known as stat padding) is now a
common practice as broker/dealers are aggregating their advisors data.

This pitfall is important to understand as:

1. Broker/dealers such as (LPL, Merril Lynch, Morgan Stanley, UBS, Raymond James, Financial Network, etc.) do not provide
direct services to client relationships, they are a clearing houses for trades, commissions, advisory fees and they provide
regulatory and compliance oversight for their registered reps and investment advisor representatives.
2. Advisors within the broker/dealer network are not directly involved with services related to a plan sponsor client - a fiduciary
agreement is between a plan sponsor and an named advisor (i.e. Andrew Prevost), so with this in mind, it is critical to understand
the professional service model "Andrew Prevost" is delivering to you as a plan sponsor client.

For plan sponsor use only. Not for further distribution.

RFP Advisor Search Potential Pitfalls

Within advisor RFPs, there should be many specific questions pertaining to the local firm or local staff or local advisor that will
work closely with the Plan Sponsor Retirement Plan Committee. What sometimes happens in these situations, advisors will go to
their broker/dealers for responses to RFPs based on aggregated broker/dealer information (i.e. LPLs aggregated advisor firm
metrics).

The question a plan sponsor must ask is, Were these RFP questions directly answered by the servicing firm and their staff? or
were the questions answered with data pertaining to an aggregated broker/dealer response? Examples of RFP questions are
below:

Provide a brief overview of the services provided by your firm that specifically will be involved in the servicing of our
retirement plan.
Indicate how many years your service team has been active in the defined contribution business.
How many defined contribution plans does your local team currently consult for?
Please provide a breakdown of the number of clients your team services by plan type as a percentage of your total
business.
List your retirement industry designations held by your staff that will service our plan and explain each.
How does your firm define and measure the success of its retirement plan consulting relationships?
Please describe your firms experience helping clients through complex process such as DOL audits, IRS audits, voluntary
compliance actions, partial plan terminations, plan mergers or spin-offs, plan terminations, or corrective contributions.
What is the average number of clients managed by the consultant team for plans of this size?
What are your client retention statistics for each of the last three years for the specific team servicing our plan?
Please provide a current list of representative clients. Please list four reference clients similar to our organization.
What experience do you have with our current service provider (i.e. Fidelity)? What relevant issues should we be aware
of/focused on?
What plan design initiatives have you led with your clients in the past 24 months?
What is unique about your firm / team that would make you qualified to be a good partner?