Plan Sponsors

What Do Plan Sponsors Want?

NAPA Net recently reported on a study conducted for MassMutual Retirement Plan Referrals (Greenwald & Associates, 2015) that focused on reasons why plan sponsors recommend – or don’t recommend – their advisors.

The study included 565 employers that sponsor retirement plans – 449 of these worked with advisors and 116 that did not. Recordkeeping assets ranged between less than $1 million to as much as $75 million.

Of the group of 449:

  • 88% of sponsors would recommend their advisors
  • 75% were “very likely” to make a recommendation
  • 10% said they were unlikely to recommend their advisor
  • 94% judged advisor cost and benefits as valuable and were satisfied with their advisor overall.
  • The study found that the larger the retirement plan’s assets were, the more likely the sponsor gave their advisor a high rating.
  • 35% of those sponsors surveyed indicated they had switched advisors, and of this group, a full 41% said they did so because they believed the previous advisors were failing to provide acceptable support. Some of the other criticisms included:
    • Insufficient interest or involvement in the plan
    • Lack of knowledge
    • Difficult to work with
    • Unresponsiveness
  • Other reasons for switching advisors were:
    • Costs/fees
    • Change in management/ownership
    • Wanting improved service
    • A better plan and/or investments
    • Poor performance and returns

So What Do Sponsors Want?

58% of sponsors indicated they find advisors through referrals; by asking for one or getting an unsolicited one.

Only 10% of sponsors do an online search. Here are the top search criteria:

  • 72% look for an advisor who works with companies like theirs
  • 47% want to see customer testimonials
  • 43% were drawn to an effective website
  • 41% were motivated by a good value proposition
  • 40% Liked sites where advisor’s fees were stated clearly
  • 29% Wanted an advisor in their local area.

Development Possibility

As pointed out above, almost 21% of the responding sponsors didn’t use an advisor. Yet:

  • 43% of this group indicated they would be willing to work with an advisor for their scheduled plan review.
  • 35% indicated they were willing to work with an advisor any time.

Let QBI know how we can help you develop improved support and business growth.

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