What are retirement plan sponsors looking for from plan advisors? David Levine, a principal with the Groom Law Group in Washington, D.C., wrote for NAPA Net magazine that advisors may need to start at the beginning when explaining their value proposition to plan sponsors.

He listed the three most common questions he gets from sponsors about retirement plan advisors.

Does it matter which advisor I use?
Levine noted that advisors run unique practices and offer different value adds for their clients. They need to focus on that when talking with plan sponsors.

Why does my advisor charge more for services than others?
Some plan sponsors may just be looking for the cheapest option available, Levine wrote, but others want to make sure they’re getting the best value. Advisors who work with plan sponsors should demonstrate their value proposition on an ongoing basis, not just in initial meetings with a plan sponsor client, he said.

Why does my advisor offer so many extra services?
This goes back to the first question and is part of what makes one advisor unique, but can come across to plan sponsors as a way for advisors to charge more if they don’t see the value in the extra offerings. Levine said that advisors who expand their service offerings should make sure they can justify them to their clients.

“As service providers of all stripes, we live in a world of convergence of services where record keepers, TPAs, accountants, advisors and lawyers are providing services that can be complementary and competitive at the same time,” Levine wrote.

That competition is going to increase, he added, as the industry becomes more saturated. With so much focus on fee disclosure, which the proposed Department of Labor fiduciary rule will only exacerbate, it’s easy for the bottom line to become the deciding factor in all of a client’s decision making, but Levine said that “relationships with plan sponsors remain key.”

“Explain why you are a strong business partner and what you bring to the table in terms of value,” he said, “because, in the end, when the questions are asked behind closed doors, it seems that communication and support, no matter the change in products or technology, is what so often matters most.”

— Read “How to Make Your Value Pitch Truly Unique” on ThinkAdvisor.