Small RIAs Are Better Choice for Small Business 401(k) Plans

When it comes to managing your small business’s 401(k) plan, you have several options. One popular choice is to work with a large, well-known financial services company directly, like Vanguard of Fidelity. While these companies may offer a certain level of brand recognition, they often fall short in providing the personalized service and attention that that small business 401(k) plans require.

That’s where small Registered Investment Advisor (RIA) firms, like nVest Advisors, come in.

The Advantages of Small RIAs for Small Business 401(k) Plans

If you are an employer looking to start a plan for the first time, or are a small or micro-company with $5 million or less in the plan already, we need to be perfectly frank with you here: a small or startup 401(k), SEP IRA, SIMPLE IRA, 4o3(b) or other workplace retirement plan will often have two significant disadvantages when it comes to working directly with large retirement plan vendors: they consider your plan too small to devote much time to, and their fee structures will make your plan prohibitively expensive (or at least place your company at risk of regulatory problems or even civil lawsuits by your employees).

Working with a smaller RIA firm, like nVest Advisors, puts your company and your team at the greatest advantage to maximize your plan’s potential benefit. There are a number of ways that working with a smaller RIA firm will benefit both your management team, and your loyal employees:

  1. Personalized Service and Attention For Small Business 401(k) Plans:

  • Individualized Investment Advice: Unlike large firms that often rely on automated systems, small RIAs like nVest can provide personalized investment advice tailored to your specific needs and goals. They take the time to understand your business, its unique characteristics, and the retirement objectives of your employees.
  • Direct Access to Decision-Makers: When working with a small RIA, you will always have direct access to the decision-makers who are responsible for managing your plan. This means that you can get answers to your questions quickly, and have your concerns addressed effectively.
  • Proactive Communication: Small RIAs are more likely to proactively communicate with you about your plan’s performance, changes in the market, and any potential risks. This can help you  – and your employees – make informed decisions about your plan’s management.
  1. Focus on Client Needs:

  • Smaller AUM Plans Receive More Attention: Small RIAs like nVest Advisors specialize in serving smaller businesses and their 401(k) plans. It’s our “bread and butter”. This means that your plan will receive more attention and personalized service compared to larger plans managed by mega-companies.
  • Tailored Investment Strategies: Small RIAs can develop investment strategies that are specifically designed to meet the needs of your employees. They can consider factors such as age, risk tolerance, and time horizon when making investment decisions. At nVest Advisors, we even actively survey your employees every year, to hear what kinds of investments they want available.
  • Comprehensive Plan Design: Smaller firms can take the time to help you design a 401(k) plan that is not only compliant with ERISA regulations but also meets the specific needs of your business and employees, because your plan is much more important to them than a small plan swimming in an ocean of billion-dollar mega-corporations.

Partnership with a small RIA firm is best for most small business retirement plans.

  1. Lower Costs:

  • Competitive Fees: Firms like nVest Advisors typically offer more competitive fees than larger financial services companies. This is because they have lower overhead costs and can pass those savings on to their clients.
  • Transparent Fee Structures: Small RIAs are more likely to have transparent fee structures, making it easy for you to understand how we charge you for your plan.  This can help you avoid hidden fees and ensure that your plan is being managed efficiently.
  1. Fiduciary Responsibility For Small Business 401(k) Plans:

  • Acting in Your Best Interests: As fiduciaries, small RIAs are legally obligated to act in the best interests of your employees. This means that they must put your employees’ needs ahead of their own and avoid conflicts of interest.
  • Regular Monitoring and Reporting: Small RIAs will regularly monitor your plan’s performance and provide you with detailed reports. This can help you ensure that your plan is on track to meet your employees’ retirement goals.
  1. Strong Relationships:

  • Building Trust: When you work with a small RIA, you can develop a strong relationship with your advisor. This can make it easier to discuss your concerns, get answers to your questions, and make informed decisions about your plan.
  • Personalized Service: A strong relationship with your RIA can also ensure that you receive personalized service and attention. Your advisor will understand your unique needs and goals and can tailor their advice accordingly.

Working together, small businesses are unstoppable

While large financial services companies may offer brand recognition, small RIAs like nVest Advisors provide the personalized service, much higher levels of attention, and expertise about your company, your plan, and your team, that small business 401(k) plans require.

By working with nVest Advisors, you can ensure that your employees’ retirement savings are being managed effectively and in their best interests.

Are we a good fit for your company’s plan?

The first step is a simple and no-cost Plan Q&A Meeting with our team. Let’s examine your needs and see if we’d be a good fit for your company and your team. Book your consultation today!