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What Plan Sponsors Want in a Retirement Advisor: MassMutual

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Retirement plan sponsors are paying close attention to advisors’ value propositions. A survey released in January by MassMutual identifies what they’re looking for.

MassMutual surveyed over 560 retirement plan sponsors with less than $75 million in assets under recordkeeping. Most respondents — 449 — were working with an advisor.

“MassMutual’s research points to what we call the ‘winning combination,’ the key values that employers want from a financial advisor who services and supports retirement plans,” Elaine Sarsynski, executive vice president for MassMutual Retirement Services and Worksite Insurance, said in a statement.

Sponsors were asked to choose from a variety of advisor personas to identify which combination of values offered would be most helpful in plan management. Advisors who emphasized employee education and good customer service as part of their core value proposition were chosen most often.

“Education is very important to sponsors, regardless of whether they are currently working with an advisor. The majority would like an advisor to educate employees on the retirement plan benefits as well as the importance of contributing to the plan,” according to the report.

However, the report found that advisors have noticed that desire among plan sponsors but have struggled to get cooperation from plan sponsors and support from providers in delivering on that value.

“Advisors find it difficult to motivate sponsors to schedule a time where they can come in and conduct group or one-on-one meetings,” according to the report.

Education was “imperative” to sponsors, the report found. The majority of respondents wanted an advisor to provide in-person education at least annually, but over a quarter of sponsors who don’t currently have an advisor and 34% of those who do want someone to come in semiannually to meet with participants.

Among respondents who were already working with an advisor, fiduciary services were also important. Sponsors who didn’t have an advisor were more focused on someone who could reduce plan costs.

Larger plans had slightly different needs from smaller plans, the survey found. Sponsors with more than $25 million were concerned about fiduciary responsibility of their advisor and lower costs, but also the overall plan design, benefits available to participants and the investment menu.

Where Can Advisors Improve?

The study found that although the majority of advised sponsors are satisfied with their advisors, there’s room for improvement. Just a third of sponsors with less than $1 million in plan assets say their advisor is very valuable, compared with 57% of those with between $5 million and $25 million.

“While employers clearly gravitate to retirement plan advisors with specific attributes, our research shows that few advisors succinctly articulate their value proposition or can give an elevator speech about their value,” Mathew Greenwald, president of Greenwald & Associates, which conducted the survey for MassMutual, said in a statement. “Advisors who can clearly articulate their value and differentiate themselves from their competition have a real edge in the marketplace.”

Educating employees in group meetings and sponsors on new developments were two areas respondents rated their advisors as only fair or poor. Advisors serving plans with less than $1 million in assets especially need to focus on providing information on new developments in retirement plans, according to the report.

“Our study shows that advisors often aren’t practiced in succinctly articulating their added value,” Sarynski said. “There are clear opportunities for advisors to enhance their practice management to reflect plan sponsor preferences.”

— Read 3 Questions Retirement Plan Sponsors Ask About Advisors on ThinkAdvisor.


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