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As a plan participant, it can be overwhelming to understand every aspect of your company’s retirement plan. Most people start with the basics, and the first question is usually what the match is. Once you know that, you have to figure out if it is feasible to contribute enough to get the match from your employer and how to invest the money. You should have some resources available to you the help you make these decisions. We’ve found that many participants don’t fully understand where to find the resources or what each service provider does for them.

For this article, we’ll focus on the Investment Advisor, the Recordkeeper, and the Plan Sponsor. These are the parties that the participant interacts with the most. Each has distinct roles and while there is some overlap, it could save you some headaches if you know where to go when you need something.   

Plan Sponsor

This is usually an HR person or a Finance person at your company. They’ll let you know about the plan and give you the initial information on it. You can save this person some time by going straight to the service providers for what you need after you are enrolled in the plan. They are in charge of hiring the service providers and making sure that they are being resourceful to the plan participants. This person should be made aware of any issues you are having with them if they arise.

Investment Advisor

The Investment Advisor is hired by the Plan Sponsor and usually assists him or her with selecting the other service providers, creating a fund lineup for the participants, and monitoring that fund lineup regularly. In addition to that, the Investment Advisor serves as a resource to the employees for financial education. In most cases, the Investment Advisor is the face of the plan. He or she is the first person you meet with to learn about the plan and make decisions.

When should you contact the Investment Advisor? First and foremost, you should utilize him or her to help you determine how much you can save and to help you pick your investments. If you have a plan from a prior employer that you want to consider rolling over into your new plan, the Investment Advisor can help you evaluate your options. This all mostly occurs during the initial setup of the plan.

As the years go by, you can lean on the Investment Advisor for questions you have about retirement, your contribution rate, your investments, or really anything on your mind about your financial life. Some advisors visit employers regularly. Others have relationships with the employees and meet with them when needed. Regardless of the makeup of the engagement, your Investment Advisor could be a great resource for you.

For security reasons, the Investment Advisor is not usually able to process financial transactions for you. That leads us to the final party covered in this article.

Recordkeeper

On a personal level, you may interact mostly with the Investment Advisor. However, the Recordkeeper is the most visible. If you access your account online, it is through their website. If you receive paper statements, they provide them. All transactions including trades, contributions, loans, withdrawals, and password resets are processed at the Recordkeeper.  While your Plan Sponsor or Investment Advisor may be able to get you the phone number or e-mail address, the Recordkeeper will ultimately be who you need to contact for these issues.

The easiest way to think about it is that your Investment Advisor is there to give you advice and the Recordkeeper is there to implement it. Anything you want to discuss or learn about is something you should reach out to the Investment Advisor for. Any changes or updates should be done through the Recordkeeper. When in doubt, touch base with your Investment Advisor and he or she should be able to at least point you in the right direction.

It is important to remember that investments in securities involve risk, including the potential loss of principal invested. Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against loss in a declining financial market. This publication should not be interpreted as legal, tax, or investment advice. For more information, please visit alliancewealthadvisors.com/legal-disclosures