IMHO: Looking Class

Each year we receive a number of inquiries from advisers about the awards, and many of these fall into a category I tend to think of as “exploratory”—feelers as to what we are looking for. 

Well, at its core, what we hope to acknowledge—and, thus, what we are looking for—hasn’t changed at all: advisers who make a difference by enhancing the nation’s retirement security, through their support of plan sponsor and plan participant information, support, and education.  And, since its inception, we’ve focused on advisers who do so through quantifiable measures: increased participation, higher deferral rates, better plan and participant asset allocation, and delivering expanded service and/or better expense management.

A Different World

Of course, the world has undergone much change since we first launched those awards, and advisers now have an expanded array of tools at their disposal to make those results a reality—legislatively sanctioned automatic enrollment, contribution-acceleration designs, qualified default investment alternatives, and a broadly greater emphasis on transparency and disclosure of fees.  These steps have been good for our industry, great for participant retirement security and, IMHO, have served to raise the bar for our award at the same time. 

So, what will we be looking for this year?  Well, last month I wrote a column outlining advice I have given to plan sponsors over the year about choosing an adviser.  Of those seven areas (see “IMHO: ‘Right’ Minded”), several fall into what I would consider to be a personality match between plan sponsor and adviser—important to a productive working relationship, but not within the scope of our award. 

Standards Setting

On the other hand, there are areas—critical areas—that absolutely apply.  Now, I’m only one judge (albeit, IMHO, an influential one) on the panel, but advisers I am looking for:

Have established measures and benchmarks for plan success.  Those benchmarks should include the measures noted above: participation, deferral rates, asset allocation.  If you can’t tell me what your targets are and how your client base stands in relation to those targets, IMHO, you’re using the “wrong” benchmarks.  I’m also interested in advisers who not only use those as a matter of course in running their business, but who develop them in partnership with their plan sponsor clients—and who regularly and routinely communicate results to their plan sponsor clients.

Fully and freely disclose their compensation.  I’m frankly a lot less concerned with how you get paid than that your plan sponsor clients know what they are paying for your services. 

Work at staying current on trends, regulations, and product offerings. The best advisers read, attend conferences and/or informational webcasts, have attained (and maintained) applicable designations, and commit to a regular course of continuing education during the course of the year.  This business is constantly changing; if you’re not constantly learning, you—and your clients—are being left behind.

Encourage and inspire their clients. Client referrals have always been a key element in our award, and as the overall quantitative standards rise, the significance of the qualitative element afforded by client references (and award nominations) will almost certainly increase.   How often do you talk with your clients?  How often do you visit?  How—and how often—do you communicate with them regarding regulatory and legislative changes?  You know what you’re trying to do for your clients—do they?   

Are willing to accept fiduciary status with the plans they serve.  This is an area our judges have debated vigorously over the years.  I’ll admit some great advisers have been barred from accepting fiduciary status by forces they don’t control.  I’m not (yet) saying you have to be willing to accept fiduciary status in order to get my vote, but it’s a factor—and, IMHO, an increasingly important one.

We launched our Retirement Plan Adviser of the Year award in 2005 to acknowledge “the contributions of the nation’s best financial advisers in helping make retirement security a reality for workers across the nation.”  It has always been our goal to bring to light the very best practices of the nation’s very best advisers (and adviser teams), and in so doing, to help set—by their example—new standards for excellence in dealing with workplace retirement plans.

That’s what we’re looking for—and looking forward to acknowledging—this year as well. 

P.S. Information about the nomination form/process will be published in the September 8 issue of PLANADVISERdash.