The adage, which pays homage to the persuasive powers of salespeople, applies to some 401(k) plans as well.
The system creates a potential conflict between brokers' obligation to give employers sound advice and their natural desire to earn the highest possible commission.
A 2005 brochure distributed to brokers by Principal Financial Group Inc., an Iowa insurer and 401(k) provider, underscores the dual role brokers play:
"They [clients] turn to you for guidance, rely on you for advice and trust your recommendations. The Principal Financial Group needs you too.
"We understand retirement plan solutions aren't purchased; they're sold by professionals like you," says the brochure, which includes this small-print disclaimer: "Not for distribution to the general public."
The pamphlet details the compensation that Principal pays brokers who deliver small 401(k) plans. They receive a commission equal to 0.30% of existing plan assets and up to 2.25% of the money that employees add to their accounts each year.
Brokers who sign up five 401(k) plans receive a "volume" bonus equal to 0.15% of employees' annual contributions. For 10 plans, the bonus rises to 0.25%.
In a statement, Principal spokeswoman Terri Hale defended the sales incentives, which are common in the insurance industry.
Tellingly, the statement referred to brokers as "marketers."
"We fully communicate the details of our marketer compensation to the people who need to know them and understand them: our marketers and plan sponsors [employers]," the statement said.
"To assert that marketers bring their business to the Principal solely based on compensation would be inaccurate and misleading."
Principal disclosed in a regulatory filing last year that it had received a subpoena from New York Atty. Gen. Eliot Spitzer seeking "information on compensation agreements associated with the sale of retirement products."
Peter Demmer, chairman of Sterling Resources Inc. in Paramus, N.J., a consultant to 401(k) providers, acknowledges that sales commissions and volume bonuses create the potential for conflicts of interest. But the system is necessary to compensate brokers for the work they do and give them an incentive to take on small plans, he said.
Brokers typically have compensation arrangements with several providers, Demmer added, making it unlikely that they would steer all their customers to one company just to earn a bonus.
Because of competition, he said, a broker who recommends a provider simply because it pays high commissions wouldn't stay in business.
"A broker can't survive by acting as a shill for a particular company," he said.
One company that has received volume bonuses from Principal is 401(k) Advisors in Laguna Hills. On its website, 401(k) Advisors says it provides consulting services to employers "to ensure a successful retirement plan experience both for you and your employees."
Of its clients that chose insurance companies to provide their retirement plans, 9 out of 10 are signed up with Principal, according to a database search by Judy Diamond Associates, a benefits research firm.
Vincent J. Giovinazzo, chief executive of 401(k) Advisors, formerly ran Principal's Orange County office.
Giovinazzo said there was a good reason so many of his clients selected Principal: His firm and Principal specialize in small employers. Principal's bonus program isn't a factor, he said: "We don't have any allegiance to one provider or another."
Giovinazzo said that although the bulk of his compensation came from commissions, most of his new clients pay him on a fee-for-service basis. He said he preferred this approach, calling it "the purest way."