Taking the Pulse

Illustration by Jon Han

Being in a hands-on, detail-oriented service business, many retirement plan advisers may think they know all there is to know about their plan sponsor clients. However, plan sponsors may not always be forthcoming about reservations they may have or, for that matter, services they appreciate. Furthermore, retirement plans are often overseen by disparate constituencies with very different goals, including human resource (HR) executives who want to attract and retain talent, the finance team, which wants to keep costs in check, and members of the retirement plan committee and legal staff, who are primarily concerned about their fiduciary exposure.

To learn more about their clients’ perceptions of service and deliverables, some retirement plan advisers now survey the plan committees and other key executives at their clients’ firms, either annually or once every few years, to make sure they are meeting their clients’ goals, to learn about emerging interests and trends among plan sponsors and to determine whether everyone at the client is on the same page. Client surveys also help solidify relationships and, when the results are positive, yield potential references and help advisers better crystalize their value proposition.

For the past 15 years, Strategic Retirement Group of White Plains, New York, has been surveying its clients, for all of these reasons, says David Hinderstein, president. “The No. 1 reason is to know what they are thinking about us and, No. 2, to get their feedback on how we could perform services better,” he says. “We don’t just survey the main contact at each client, but everybody who touches the plan from a fiduciary decisionmaking perspective because HR comes at it differently than finance and legal.”

The surveys have exposed areas where not everyone at the client has had the same perception of Strategic Retirement Group’s services, Hinderstein says. “We have been able to identify areas where we can communicate better—where we were communicating well with HR and finance, for instance, but missing legal,” he says. “Surveys have enabled us to look at each individual client and person to make sure everybody is happy. Surveys have also helped us further improve certain services held in high regard and, taking the results in the aggregate, to foresee trends and to learn about new ideas.”

When surveys are conducted anonymously, this lets sponsors give advisers candid feedback and tell them about concerns they may hesitate to bring up in person, agrees Heather Smiley, chief marketing officer of retirement and worksite insurance at MassMutual in Boston.

But advisers should be prepared for surprising results. “It’s amazing how far we can be from reality on any given observation,” says Jim McQuillan, president of RJF Financial Services in Minneapolis. Surveys can inform you of “weak spots in your deliverables,” he says.

Staving Off the Competition

The increasing competition in the retirement plan industry prompted Baystate Financial of Wakefield, Massachusetts, to begin surveying its clients, five years ago. “The retirement plan marketplace is getting cluttered,” says Stephen Cunha, vice president and retirement plan coordinator. “We know when we do a review with a client that it has received upwards of 30 calls from competitors promising to save it 5 basis points. Every week, it’s getting calls. Surveying the client says we care about what it thinks and the service model we are providing—in a format in which [the client] can be more honest than face-to-face.”

Smiley concurs that if advisers “are not tapping into your clients with some sort of feedback loop, they’re leaving themselves open to someone else swooping in and landing their business.”

Technology, as well, has leveled the playing field in the retirement plan industry, says Roger Metzger, chief investment officer (CIOI) and president of Hooker & Holcombe in West Hartford, Connecticut. “It’s allowing large firms to compete in the small space and smaller firms to compete for larger pools of money,” Metzger says. “If you’re not making sure clients are happy or addressing concerns they may have, you’re asking for trouble. From a self-preservation standpoint, surveying clients is a critical part of your practice.”

The increasing market volatility and its impact on investments is another reason advisers should consider surveying their clients, says Peg Booker, director of marketing and communications at Hooker & Holcombe.

As a result of the surveys that Baystate Financial has conducted, Cunha says, the practice has modified its offerings, made its clients happier and staved off “an ongoing deluge of solicitations.” Cunha has also found surveys to be particularly useful for determining the practice’s service model for new clients.

Surveys, particularly when the results are positive, can definitely solidify client relationships, McQuillan says. “If [a client] says we are doing everything it expects, the very process of it going through that exercise is a game-changer for us,” he says. “If it acknowledges that we are hitting on every cylinder and affirms that we are providing it with everything [it] bargained for, this helps insulate us from the competition.”

Surveys can also yield potential references, he adds. “Prospects are always asking for names, and the more we can spread that out among our client base, the better.” Baystate Financial occasionally includes survey comments in requests for proposals (RFPs), Cunha says.

A Path to Growth

In the past few years, Hinderstein has met his goal of growing Strategic Retirement Group’s revenue by 15% a year, something he attributes to the information he has gleaned from surveying his clients. “If you want to grow at that rate, you need to systematically do something commensurate with that,” he says.

Domenic DiPiero, president of Newport Capital Group of Red Bank, New Jersey, agrees that surveying clients is a “natural evolution for a business looking to grow. As companies grow to scale, they will have to do these kinds of analytical things,” he says.

DiPiero, whose firm has $8.5 billion in assets under advisement (AUA) at 104 clients, says surveys are particularly useful for the leadership of midsize to large retirement plan practices that otherwise would have trouble gaining a direct impression of their clients’ opinions. In fact, DiPiero took the results of the survey that Newport Capital conducted last fall a step further by making personal phone calls to each of the survey respondents. “I wanted to talk to everybody, and that way I got more color and heard more of their ideas,” he says. Not only receiving a survey but a follow-up phone call from the president of their retirement advisory firm also pleasantly surprised clients and has helped to bolster these relationships, he says.

Likewise, Doug Prince, CEO of ProCourse Fiduciary Advisors in Carmel, Indiana, capitalizes on the survey findings, returning to the client and showing it the results. “This opens up the dialogue to figure out what we can do more effectively.” DiPiero says the results can also be informative for team members. “We showed them the positive things clients were saying about them, to create a positive feedback loop,” DiPiero says. “It’s nice for them to be recognized,” reinforces their good work and serves as a motivator, he says.

Beyond these reasons for surveying clients, McQuillan notes, there is often high turnover among the people running plans, which is why annual surveys can be very informative. “We used to survey clients every two years but recently started doing this annually,” he says. “There is so much movement among key decisionmakers at plan sponsors that we have found more often is better.”

Further, over the years, the surveys have indicated shifts in plan sponsors’ priorities, McQuillan says. Three years ago, the emphasis was on fiduciary governance, and it has since shifted to fee benchmarking, to more employee education and financial wellness, he says. “This keeps our finger on the pulse of what is driving their interests. It may not be dramatic, but there are changes, and the game is always shifting under your feet.”

Prince, too, says that the surveys he has conducted of his plan sponsor clients have shown a change in appetites. Like McQuillan, he found that, three to five years ago, their priority was fiduciary governance, but today it is education, financial wellness and also better plan design.

What Should You Ask?

Advisers primarily conduct surveys themselves, via online tools that provide a link via email; popular services include SurveyMonkey and Constant Contact. They also write the survey questions themselves.

For smaller advisory practices, qualitative surveys with open-ended questions make the most sense, Metzger says. “When we were a smaller organization, with solid relationships with our clients, we could have frank and sometimes uncomfortable conversations with them,” Metzger says. “As we’ve gotten larger and larger, this begs for a quantitative survey so we can do a statistical analysis and bucket our clients into different cohorts.” Larger practices can ask their clients to rate them on a numeric scale and, from that, see trends.

According to Booker, key questions the survey should ask are: Do we deliver the services you expected? Are you satisfied with the fund choices? Do you value our customer service? Are you happy with the frequency of our contact? Is the education we provide to your participants appropriate? Do you like our tools and technology?

Laura Mongon, a retirement plan adviser with ProCourse Fiduciary Advisors LLC in Carmel, Indiana, says it is also important to ask: Do you think we are objective and independent? Do we explain things clearly? Do we respond to your questions in a timely manner?

Hinderstein suggests: Do we keep you adequately informed of regulations? Do we provide you with adequate support in your fiduciary role? Are you satisfied with your providers?

Metzger says another key question is: Are you confident that your investment lineup is in good hands until we see you next quarter?

Smiley recommends asking: Do you think you get good value for the cost you pay? Do you think we are effectively reducing plan costs? Do we review your plan as often as you would like? “And, if you are really brave,” she adds, ask: “‘Given the same cost, would you consider moving to another adviser?’ This is a great question because it gives you a sense of whether they’re a flight risk.”

Do not forget to ask whether they would be willing to give you a reference, notes Paul D’Aiutolo, an institutional consultant with The D’Aiutolo Institutional Consulting Group at UBS in Rochester, New York. The answer to this question can also be very informative.

Following these quantitatively focused questions, the survey should include open-ended questions about what additional services the client would like, its objectives for its plan, what it thinks about service team members and if it has any comments, Mongon says.

This “can lead to new services that can add great value,” D’Aiutolo says.

The bottom line, Smiley says, is that between the increasing competition in the retirement planning industry and the new fiduciary rule, “it is more important than ever to get a handle on what your clients want. You need to demonstrate to them that you are proactively coming with advice and solutions.” Surveying them is certainly a central way to tap into their thoughts and needs.

Survey Resources and Questions

ActiFi
Advisor Impact
ConstantContact
SurveyMonkey
Zoomerang

Survey Questions

Questions to consider when surveying clients

• Do we deliver the services you expected?
• Are you satisfied with the fund choices?
• Do you value our customer service?
• Are you happy with the frequency of our contact?
• Is the education we provide to your participants appropriate?
• Do you like our tools and technology?
• Do you think we are objective and independent?
• Do we keep you adequately informed of regulations?
• Are you satisfied with your providers?
• Would you be willing to give us a reference?
• What are the objectives for your plan?
• What additional services would you like?