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.

Secure Choice vs Your Choice

SB 1234, the California Secure Choice Retirement Savings Program, activates January 1, 2017....

Read more

Women vs. Men – Differing Financial Outlooks

According to the recently released 2015 BlackRock Global Investor Pulse Survey, American women...

Read more

Terminating a SIMPLE IRA or SIMPLE 401(k) Plan

How do you terminate your SIMPLE IRA or SIMPLE 401(k) plan? SIMPLE IRA and SIMPLE 401(k) plans...

Read more