For startups and small businesses, the ability to hold onto skilled staff is paramount. Implementing a DC plan can serve as a compelling incentive, offering a tangible expression of the company's commitment to its employees' future. Financial advisors are instrumental in demonstrating how even modest DC contributions can substantially reduce turnover rates and enhance employee engagement and loyalty. They can also provide case studies that reflect the positive correlation between robust employee benefits and long-term retention.

A DC plan is not just advantageous for employees. Business owners stand to gain from tax deductions on contributions, effectively lowering their taxable income. Advisors can delineate these benefits, illustrating the immediate financial savings and longer-term growth strategies. Furthermore, discussing these tax advantages facilitates natural collaboration with clients' accountants, opening doors to new professional relationships and opportunities.

Small businesses that do not currently have a DC plan could receive a tax credit for three years that covers 100% of their administrative costs up to a limit of $5,000 annually.  As well, starting in 2024, businesses that do not currently sponsor a retirement plan will have the option to offer what's called a "starter 401(k)" plan; a simplified, cost-effective retirement plan for small businesses. This plan would be simpler and less expensive to operate compared to a traditional 401(k) plan. Advisors are vital in unpacking these complex legislative changes for their clients, ensuring small businesses capture all available benefits to offer competitive retirement plans.

Technological advances have made managing DC plans far simpler. With digital platforms, even startup and small-scale plans can be administered effortlessly. Advisors can guide clients through the selection and implementation of digital management tools that offer payroll integration, real-time updates and self-service capabilities. This support is crucial in minimizing administration burdens and enhancing plan sponsor and the participants' experience. 

The diverse array of investment choices within DC plans can be tailored to meet various financial goals and risk profiles. Advisors can lead the charge in designing investment menus, conducting performance monitoring, and adjusting strategies as necessary. This personalized approach ensures that plans remain enticing to employees and in line with the company’s financial goals.

In certain states, there are legal mandates for businesses of a certain size to offer retirement plans. Advisors can guide businesses in proactive plan establishment, helping them avoid the pitfalls of rushed compliance and positioning them as forward-thinking in their benefits offering.

Just as diversification is vital in investments, diversifying services shields advisors against competitive incursions. It can be seen as building a moat around their business. By offering DC services, particularly for startups and small businesses, advisors embed themselves within their client's financial ecosystem. This holistic approach minimizes the chances of another advisor or firm gaining influence over their clients.