It’s Financial Wellness Month: Is it Time to Update Your Investment Options?

January 11, 2023

Managing an employee retirement plan can create responsibility for you to ensure your participants’ best interests are met in the best way possible. At DCS Pensionmark, we understand the difficulties sponsors face in having their plans remain compliant and in line with their participants goals.

With the right resources, understanding the investment landscape of an employer-sponsored retirement plan can make the evaluation process much easier. Our investment guide is a great tool to help plan sponsors assess their investment options and ensure their retirement plans stay up to date. Read on to understand four signs that it may be an optimal time for sponsors to add or replace investments in their retirement plans.

Similar Plans Have Lower Fees

One of the first signs that it may be time to update your investment options is if you start to see similar plans with lower fees. This can indicate that your participants are overpaying for their investments and, if left unchecked, it can put you in violation of your fiduciary duty. You don’t have to offer the lowest fees, but you do have to have reasonable fees that are considered fair for what you’re offering.

Thankfully, reviewing your fees has become easier than ever, especially if you work with a qualified financial professional who can help you sort through the details. When comparing fees, however, it’s crucial to make sure you are looking at similar plans.

For instance, you cannot compare an actively managed fund to a passively managed fund and expect no difference in fees. These are much different investment vehicles and they will have drastically different fee structures. Be sure the plans you are comparing are similar in nature.

There Have Been Major Changes to the Investment Structure

Like everything, investments change over time, and the investments offered as part of an employer-sponsored retirement plan are no different. This means that what may have been a well-suited investment option for your plan originally can become inconsistent with your investment policy statement over time.

Maybe that fund is now owned by a different investment firm, or is investing in a way that no longer aligns with your plan’s needs. Or perhaps the fund has stayed the same but you have decided to offer DEI or ESG investments to your participants.

No matter what the situation, regularly reviewing the structure, investment philosophy, and holdings of the funds you offer is an important part of being a plan sponsor. If an investment option no longer fulfills the role it needs to, it may be time to reconsider your choice.

Long-Term Performance Has Been Poor

This may be the most obvious sign, but if an investment offering has been consistently underperforming based on the appropriate benchmarks, then it could be time to replace it. Keep in mind that no investment will perform perfectly 100% of the time. There are natural ebbs and flows to the market that make it impossible to be in the green at all times. But if you notice a particular investment is always in the red, or seems to drop significantly more than the other investment choices, you may want to consider updating your selection.

Though important, investments should not be judged on performance alone. You should also consider the role it plays in the overall offering. For instance, maybe it’s not performing as well as the other funds in your plan, but it acts as a counterbalance to volatility because it has a low beta (or correlation) with the stock market.

You can also look at other financial metrics like the Sharpe Ratio to judge a fund’s performance against other investment options. Keep in mind that these comparisons should always be done over the long term to avoid making hasty decisions based on day-to-day market fluctuations.

Plan Participants Have Made Negative Comments

In addition to information you gather yourself, you should also pay attention to feedback received from plan participants, with special attention given to any complaints made. As a fiduciary in charge of handling your employees’ hard-earned retirement assets, it is important to consider if plan participants are unhappy with the investment offerings available.

Though your decision to update your selection shouldn’t be made based on participant complaints alone, they could be helpful in identifying the true needs of your participants and how to structure your plan in a way that meets those needs. After all, a retirement plan is supposed to be for the participants’ benefit.

Ready to Update Your Employer-Sponsored Retirement Plan?

Without access to the proper advice and guidance, updating your investment options can prove to be overwhelming and stressful. We at DCS Pensionmark understand that reviewing and revising your investment options is an important part of plan sponsorship, and we are here to help. Our team of experienced professionals can provide you with personalized support to ensure your investment selections are tailored to your specific goals. We are passionate about helping small business plan administrators make the most of their plans, so reach out if you have any questions or would like to review your current investments. Get in touch by emailing

About Dan

Dan Shapiro is a retirement plan advisor and holds the Accredited Investment Fiduciary® and Certified Plan Fiduciary Advisor certifications. With over 30 years of experience in the industry, Dan guides his clients through the entire retirement plan process, from plan design to compliance to investment oversight. His goal is to provide his plan sponsor clients with the ability to offer the right retirement plan the right way to their employees—a plan they can be proud of. He is one of the original 100 Accredited Investment Fiduciary® practitioners in the United States and uses his knowledge and experience to implement best fiduciary practices to ensure employees have appropriate investments to choose from and employers have a well-documented fiduciary process in place to mitigate risk. Dan is known for taking the time to understand his clients’ unique goals and situations and applying his holistic approach to customize and develop tailored strategies to improve outcomes and take some of the plan sponsor burden off their shoulders.

When he’s not working, you can find Dan at the park and marina near his house training his Australian Shepherd. He cherishes his frequent FaceTime calls with his grown children who live in Israel. In fact, Dan and his wife, Rita, consider their proudest life achievement to be raising their two children, Ashley and Joshua, to be productive and principled adults. Dan and Rita love to entertain, especially when it includes making great food with the smoker and barbeque. To learn more about Dan, connect with him on LinkedIn.

Pensionmark Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).