Small business 401K - does owner need a financial advisor for the plan?

[Parkinglotracer]

Helping a friend research changing his small business 401K provider. He has a dental practice of 5-10 employees. Currently he and his employees use an administrator and are limited to using American funds. He would like his employees (and himself) to gain access to low cost vanguard index funds and reduce plan fees.

Researching the BH forum I see where others have recommended guideline.com and employeefiduciary.com as low cost third party administrators for small businesses. In addition to hiring a firm like those two is it “prudent” for a small business owner to also hire a retirement plan focused advisor that would help creat the paperwork with the plan but also add administrative fees?

Personally I would not use an advisor but with our litigious (lawsuit crazy) world today is a small business employer going to increase his workload or leave themselves open for legal problems if they don’t have an advisor as part of a small business 401K plan team?

I talked to a vanguard small business 401K administrator salesperson referred by Acensus (another Third party administrator) and the Vanguard salesperson said they always provide a list of local “retirement plan focused advisors” to small businesses they administer for (he said it would be a conflict of interest if vanguard advised for a plan they administered) and he recommended an advisor is used to make sure the small business 401K plan / paperwork is properly conducted in accordance with gov rules/ laws.

Should I tell my small business owner friend it’s prudent to include an advisor in his 401K he offered his employees or should I advise him to help them save the advisory fees or forced to use higher expense ratio share classes that will have to be added / used?

Thank you

[GeMoney]

For 401k plan providers like Guideline where the investment selection is predefined by them acting as an Investment Manager there is generally not a need to get a third party financial/investment manager. Of course the company should at a high level review their offerings to be sure it seems reasonable and in compliance with ERISA. https://success.guideline.com/helpcente ... -fiduciary

I've helped set up some 401k plans where an investment manager was necessary and trying to be a Boglehead with them can be painful. Also don't forget to get an ERISA fidelity bond from their business insurance provider.

[Parkinglotracer]

Thank you - I appreciate the counsel!