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The first step to make sure that your plan has great investments is to make sure that you have an advisor based plan. And advisor based plan means that there is a financial advisor monitoring the investments and offering guidance to the plan sponsors. Without an advisor on the plan, there is quite possibly somebody who is not an expert in the industry choosing the mutual funds available for your participants. Or, the plan might have generic or proprietary funds in a boilerplate 401(k) product. Is this really the best value for your employees?
Secondly, as a financial advisor, I avoid plans with a majority of proprietary funds. In fact, the Department of Labor guidance is to use multi-managed funds in a plans target date portfolios. It makes even more sense to have multi-managed mutual funds throughout the entire lineup. That is, why limit yourself to one fund company?
We also use third-party reporting tools such as fi360, Morningstar, or Misero to see how your fund lineup stacks up to comparable funds. For examples on how this report looks please contact me.
Other things to keep in mind: