How Vendor Relationships Can Create Hidden Fiduciary Risk — Even When Performance Is Strong
The Comfort Trap: Why Familiar Vendors Create Blind Spots
Most plan sponsors trust their long-time vendors. The advisor knows the culture. The broker knows the leadership team. The recordkeeper has “always been fine.”
But familiarity isn’t a fiduciary process — and the longer the relationship, the easier it becomes to overlook risk signals.
Vendor relationships often create:
Assumptions about competitiveness
Resistance to evaluating alternatives
A false sense of safety (“no complaints = no issues”)
These blind spots don’t matter… until they do.
The Legal Standard Doesn’t Care About Loyalty
Under ERISA, courts review:
Documentation
Impartiality
Benchmarking
Process
Not whether you “like” your vendor.
A decades-long relationship without competitive review can appear biased — even if your vendor is performing well. Loyalty may make sense operationally, but legally, it creates risk.
Three Areas Where Vendor Relationships Distort Decisions
Even high-performing vendors can unintentionally create fiduciary exposure.
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1. Fee Reasonableness
Long-term vendors rarely renegotiate aggressively.
Without benchmarking, fees may drift above market rates — and courts expect sponsors to know this.
2. Service Scope Creep
Over time, services expand informally:
“Can you help us with this?”
“Can you take on that?”
But informal expansions often lack updated pricing or contracts.
3. Overreliance on Vendor-Provided Data
Vendors naturally present themselves favorably.
But sponsors need independent validation to demonstrate neutral decision-making.
Why Independent Evaluation Restores Fiduciary Neutrality
Culpepper RFP brings objectivity back into the process.
Our evaluations:
Eliminate unintentional bias
Benchmark fees accurately
Provide impartial service comparisons
Create documentation that protects you in audits or litigation
You can keep your vendor — but with proof that the relationship is supported by process, not convenience.
How to Keep Long-Term Vendors and Still Meet Fiduciary Standards
You don’t need to change vendors to reduce risk. You need to:
Benchmark fees regularly
Conduct independent evaluations
Document renewal decisions
Ensure the vendor still fits your evolving needs
A neutral review strengthens your relationship while strengthening your compliance posture.
Protect the Relationship — and the Plan
Strong vendors deserve strong documentation.
And long-term relationships deserve fresh eyes.
Want an unbiased evaluation without disrupting trusted vendor partnerships? Let’s talk.