The company believes there are four main reasons plan sponsors would engage in an advisor RFP process.

• Plan changes over time. Retirement plans grow and change over time as a result of acquisitions, divestitures, downsizing, hiring and investment returns, said CAPTRUST. Many plan sponsors engage advisors to determine if existing plan features and services are up-to-date and appropriate for the plan's participant base.
• Increased fiduciary burden. It has become harder to comply with ERISA guidelines and Department of Labor regulations. Many plan sponsors are not equipped to cope with these increasing responsibilities and they seek to share fiduciary liability with a retirement plan advisory firm.
• Market intelligence. Advisor RFPs can provide a robust evaluation of a plan's incumbent advisor and can be used to verify that fees and services charged are competitive, identify any missing capabilities and provide written documentation of the advisor selection or benchmarking process.
• Formality of process. It isn't enough to have a long-term relationship with an advisor. DOL investigators want to know how and why you selected certain advisors. A formal RFP process can provide helpful insights to plan sponsors by allowing them to gather intelligence on the current state of the art for retirement plan advisory services, pricing for those services and the different business models of advisors providing them.

CAPTRUST Financial Advisors is an independent investment research and fee-based advisory firm that provides retirement plan and investment advisory services to retirement plan fiduciaries, executives and high-net-worth individuals. It is headquartered in Raleigh, N.C.