Retirement plan consultants offer tips for providers

A survey of retirement plan consultants conducted by Oculus Partners has identified some changes service providers need to make to their businesses in order to grow, including clarifying their value proposition for each prospect, following plan consultants’ agendas and addressing prospects’ needs more efficiently.

The report found when sponsors initiate a new recordkeeper search, the most common reasons are that they are unhappy with the service they are receiving or with fee arrangements.

When the consultants surveyed look for service providers for their clients, they search for two criteria, the report found: experience in the sponsor’s industry and market segment, and expertise in solving the sponsor’s problems. However, the report also found that providers generally struggle to present their value proposition in a way that is clear and relevant to the sponsor’s situation.

Other issues that trip up service providers trying to gain new business are not understanding the prospect before meeting and generally being unprepared for meetings, failing to complete RFP responses, and an inability to “artfully” negotiate fees and sell products.

In the large plan market, integrated defined contribution and nonqualified defined contribution services are critical. At least a third of recordkeeper searches also cited defined contribution and defined benefit integration as critical.

Consultants are also looking for experienced relationship managers who work well with the sponsor and will serve as an advocate. Consequently, service providers should have the relationship manager, rather than a salesperson, conduct presentations with prospects.