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Farrow Pension & Benefits


Rating Your Pension Advisor: Are you getting the best advice?


A couple of questions to ask yourself: 

  1. When was the last time you reviewed your plan?

  2. Do you have a defined Governance process?

  3. Do you have a service agreement? 

  4. Have your member fees been reduced, or have your funds changed, in the last 5 years? 

  5. How effective is your plan? 


We understand that Pensions and Benefits can be complicated, and your time is better spent running your business. It’s important to surround yourself with qualified advisors who can keep the clutter away. More importantly, you want an advisor who is giving you the right advice. Included in this document are five questions to ask yourself to make sure you’re getting the best advice. If you have questions, please e-mail simplify@farrowpension.com


No. 1: When was the last time you reviewed your plan? 

A good place to start is with your calendar. You should be meeting with your advisor at least once a year to review your plan. Meeting minutes should demonstrate and document that the plan is being effectively managed, should it ever get called into question. Remember, you are ultimately responsible for the proper management of these plans and your advisor should be acting as the “general contractor” on your behalf. 


No. 2: Do you have a defined Governance process? 

A well-run plan includes a “Governance Document” that clearly outlines the systems, and processes, associated with the management of your plan. Pension plans in Ontario are required to have a Statement of Investment Policies & Procedures (SIP&P) that outlines how you monitor the performance of your plan provider, and the funds they offer. In addition to your SIP&P, your “Governance Document” should confirm how you select your plan provider (and advisor), when you review fees, communication objectives, conflict of interest policies, and complaint procedures. Meeting minutes should include the results of your annual review, including action items for the upcoming year.

Remember: while you can (and should) delegate most of this to your Pension Advisor, it is still ultimately your responsibility.


No. 3: Do you have a Service Agreement? 

At a basic level, it should include the services provided, and the compensation for those services. Compensation should be reviewed during the annual review, as it often affects the fees paid by plan members. Most advisors are paid on a commission basis, which means their commission is likely built into the fees paid by the plan member. This effectively reduces the rate of return they receive on their funds and ultimately their final pension.

You should be aware of how exactly these fees are calculated, and always feel comfortable that the arrangement is fair and appropriate. There are ways to sort out compensation with little or no impact on the Plan Member’s final pension, so don’t be hesitant to ask.


No. 4: Have your member fees been reduced, or have your funds changed, in the last 5 years? 

Over time, your plan grows and your member account balances get larger. This means that your plan provider fees should get smaller. Plan providers don’t always volunteer these reductions, so it is up to your Advisor to make sure you and your Plan Members are not overpaying. Also, while Plan Providers do an adequate job monitoring the funds they offer, ultimately it should be your advisor that is recommending the funds that best meet the needs of your Plan Members.


No. 5: How effective is your plan?

Your advisor should be continuously looking at ways to maximize the effectiveness of your plan against your stated objectives.

Plan member “engagement “ is a clear measure of your advisor's performance.  Things to look at would be the level of participation for plans that don’t make participation mandatory. Another measure would be the level of additional voluntary contributions by plan members.  While your plan provider is well equipped to assist plan members, it's up to your Advisor to tailor a communication plan that gets results.


Remember, your employees are important, and so is their Pension. Make sure to get advice you can trust from an experienced Advisor.

At Farrow Pension & Benefits, we strive to make a difference in the lives of your employees and their retirement plans by making it easier for them to understand and take action. We would be happy to hear from you, e-mail us at simplify@farrowpension.com

Wayne Farrow

Over his 40 year career, Wayne has worked with hundreds of Canadian corporations to design and manage Retirement Savings Programs involving thousands of plan members.

His hands-on approach and involvement at the Plan Member level gives him a unique ability to see things through the eyes of all the stakeholders and most importantly, the Plan Member. 

He has literally been there, and done that, on the shop floor, not the 52nd floor. 

This experience has allowed him to simplify the plan design and management of retirement programs in such a way that the most important elements are clearly understood by both the Plan Sponsor, and the Plan Member. 

As he always says, “if you can’t explain it to an eight year old, then you don’t understand it.” 

You can contact Wayne at: wayne@farrowpension.ca