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Retirement Planning > Retirement Investing

How to Win Over Retirement Plan Sponsors

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Source: Fidelity Financial Advisor Solutions 4th Plan Sponsor Attitudes Survey, March 2013Retirement plan sponsors are growing more trustful of advisors’ expertise, but many sponsors remain uncertain about just what it is that advisors can do to help them, the latest sponsor attitudes survey from Fidelity Investments shows.

In other words, advisors have to do a better job of selling their services to plan sponsors, according to Fidelity’s fourth annual Plan Sponsor Attitudes Survey, which finds that sponsors’ top two expectations of advisors are 1) to help them navigate fiduciary responsibility and 2) to provide expertise on investments and retirement readiness for plan participants.

Fully 84% of the 937 plan sponsors surveyed said they used an advisor and satisfaction was increasing, but more than one-third, 38%, said they were unsatisfied while 10% said they were actively looking to switch advisors.

However, advisors since 2008 have made improvements in their relationships with sponsors, said Jordan Burgess, head of defined contribution investment-only sales at Fidelity Financial Advisor Solutions, in a phone interview on Monday. Fidelity serves as recordkeeper to more than 20,000 plans and 12.6 million participants.

Burgess noted that in 2008, 45% of sponsors were unsatisfied with advisor performance while 17% were taking action to switch to a new advisor.

Jordan Burgess“The improvement reflects that advisors are really doing a good job at being the expert,” Burgess (left) said. “They’re doing a really good job with fiduciary responsibility and deep analysis.”

Plan sponsors in the online survey, which was conducted in March by the independent researcher e-Rewards, also pointed out where advisors are falling down on the job. Here’s what sponsors said advisors failed to do:

  • Report how much time is spent working on the plan – 78% don’t
  • Report on types of activities for the plan – 69% don’t
  • Demonstrate how plan performance improved – 60% don’t

“This is clearly an opportunity for advisors,” Burgess said. “The overall trend is positive in that advisors are being used more by plan sponsors and seen as experts, but some advisors can do a better job of demonstrating their value and documenting their work so that plan sponsors know what they’re doing.”

Finally, the Fidelity survey found that sponsors defined knowledgeable advisors as having the following seven traits:

  1. Informs on regulatory changes
  2. Consults on how to manage fiduciary responsibility and risk
  3. Consults on plan design
  4. Offers proactive suggestions to improve plan performance
  5. Helps minimize costs
  6. Offers fresh insights on participant trends and behavior
  7. Helps select and monitor investment options

Check out Is It Time for Financial Planners to Advise Against 401(k)s? by Bob Clark on ThinkAdvisor.


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