Standout Performance

Art by Chris BuzelliThe annual review is the best forum you have all year long, not only to highlight the improvements that have been made to the plan and for participants, but also to explain to your plan sponsor clients your role in driving those upgrades. And, of course, by ensuring that your clients are clear on the value you provide, you will give them the confidence to ignore calls from prospecting advisers who want to take over their business.

In our cover story this issue, “Impressive Showing: Solidifying your value proposition with plan sponsors,” page 36, we discuss the items to bring up in that annual review, and why you should quantify the outcomes that have become so imperative to sponsors and participants: participation rates, deferral rates, average balances, use of automatic features, participant education and advice, and retirement readiness. The retirement plan advisers we spoke with say the responsibilities of this role are expanding, and sponsors increasingly expect advisers to go beyond “the three F’s” of fiduciary, funds and fees.

As you can imagine, getting advisers to share information about their fee arrangements, for “The Right Measure: The various types of fees advisers charge plan sponsors,” on page 48, was challenging. What we found from our discussions and surveys is that retirement plan advisers charge fees for their services in about seven different ways. Determining the right formula is critical for keeping your practice afloat, of course, but you need to consider the changing expectations of plan sponsors. Ever since the Department of Labor (DOL) passed the 408(b)2 and 404(a)5 fee disclosure requirements in 2012, sponsors have become far more astute about fees, particularly commissions, 12b-1 revenue-sharing fees and those based on assets under advisement (AUA). In examining the results of our annual PLANADVISER Practice Benchmarking Survey, it became clear that sponsors increasingly favor flat-dollar arrangements.

If you are treating each of the requests for proposals (RFPs) that reach your desk as standard operating procedure, you are missing out on an opportunity to stand out from other responders. “Correct Size: Creating an RFP that addresses each sponsor’s individual needs,” page 54, discusses the questions that retirement plan advisers should be asking sponsors—and their recordkeepers—before filling out the RFP. Questions for the sponsor that can guide you well in creating an effective proposal include: What is working—or not—for the plan? What are its objectives? What level of engagement and outcomes does the sponsor expect for its participants, and what assistance does it need to meet its fiduciary duties?

All businesses need to grow to stay afloat, and retirement plan advisory practices are no exception. “Discovering New Territory: How to expand your net,” page 58, can help you pinpoint your strengths and how to expand them, and discusses why you should acquire areas of expertise, such as fiduciary support, to distinguish yourself from the competition.

“Different Strokes,” page 42, is the 2015 PLANADVISER Recordkeeper Services Guide. Here, you can learn what resources recordkeepers can offer you, how they may compensate you and what kind of affiliations you could have.

These pieces are designed to help you rethink how you run your practice, how you serve your plan sponsor clients and what you can do to improve how their participants fare.

Mark Your Calendars 
Join us in Orlando, Florida, September 28 through 30, for the 2015 PLANADVISER National Conference! This annual event is an essential gathering for specialist retirement plan advisers who want to increase their sales and revenue, learn best practices for serving plan sponsors and drive more successful participant outcomes. Industry experts and leading advisers will discuss how you can differentiate your message and become an invaluable resource for clients. Attendees will also hear from leading legal and policy experts on the latest regulatory developments, and get to meet and network with peers. You will also have an opportunity to learn about the latest products and services from leading recordkeepers, investment managers and service providers. Register today at www.planadviser.com/event/panc2015/.