Saturday, December 05, 2009

Question Errs?

Several years back, we decided that our family was ready to upgrade to a high-definition TV (in fairness, that “decision” was in no small part predicated on the untimely “death” of the big-screen projection TV that we had purchased not too long after we married).

So, I did what any reasonable consumer would do— – I went to my local appliance warehouse to see what was available. In short order, I was able to enlist the support of a trained professional (a “professional,”, it should be noted, who turned out to be younger than the TV that we were replacing). Not that he wasn’t helpful, after a fashion. But there in that “showroom,”, it was hard for me to see (or appreciate) all the subtle differences that purported to explain the occasionally significant variances in price. Moreover, he spoke in alien terms that were clearly something I was supposed to understand— – but didn’t. And, while I don’t mind probing for explanations, after a while, even the most diligent shopper gets tired of sounding – stupid. Ultimately, he was telling me the things that he (or the TV manufacturer) thought were important, – but I had no context for what those meant to me. Furthermore, while he seemed perfectly willing to answer any questions I had, - I didn’t even know the right questions to ask.

Like my broken projection-screen TV, when it comes to workplace retirement plans, – problems— – or, more accurately, a desire to remedy them— – all too often are the driving force behind making a provider change. But, while that “necessity” may force that shopping excursion (rousing many a too-busy plan sponsor from their daily challenges), it is precisely the wrong environment in which to make a thoughtful, reasoned, and, dare I say, prudent choice.

But, in the search/evaluation process, it’s worth noting that, IMHO, there is no "best" provider. There is, however, a best provider for each plan. That said, no matter how good a match you make today, odds are there will come a time when you will want—or need—to validate that decision. The reasons are myriad: circumstances change, people leave, programs grow, budgets fluctuate, and expectations expand. Oh, and if common sense alone were an insufficient reason, the Department of Labor itself reminds us that fiduciaries “should establish and follow a formal review process at reasonable intervals to decide if it wants to continue using the current service providers or look for replacements.”

But before you rush into the search process, it is imperative that you first understand what you are looking for.

IMHO, that process starts by understanding and evaluating the services you currently receive— – and knowing what you like and wish to preserve, – as well as what areas you’d like to improve and/or expand on. It starts by understanding and evaluating what you are currently paying for those services you currently receive, and deciding how much more you’d be willing (and perhaps able) to pay to expand those offerings.

And, yes, it starts by knowing what choices might now be available to you, – perhaps at little or no cost; – choices that you might not even think to ask about, choices that you might think are— – and perhaps once were— - beyond your price range.

It starts, as did my “search” for a new TV, with a sense of the right questions to ask.

Because knowing the right questions to ask is, IMHO, essential to getting the right answers.

- —Nevin E. Adams, JD

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