Plan sponsors are more likely to work with an advisor who offers a specific value proposition of capabilities and services, something few advisors articulate, according to new research from MassMutual.
Research for the firm’s “A Winning Combination” study included presenting plan sponsors with a handful of different retirement plan advisor “personas,” each with a distinct value proposition, and asking them to choose what combination of values would be most helpful in managing their plans. Overall, plan sponsors say they prefer to work with a plan advisor whose value proposition emphasizes three specific elements:
This “winning combination” of values is especially important to smaller retirement plan sponsors with less than $25 million in assets, according to the study. Sponsors with $25 million to $75 million in assets confirm those values are important but say they have broader needs. Larger sponsors are more likely to want help from advisors with additional services and capabilities, including advice on plan design, investment selection, fiduciary support and help with other benefits.
Going Up?
“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,” said Mathew Greenwald, President of Greenwald & Associates, which conducted the study. “Advisors who can clearly articulate their value and differentiate themselves from their competition have a real edge in the marketplace.”
The study polled 565 employers that sponsor retirement plans, including 449 that worked with an advisor and 116 that did not, with retirement plan recordkeeping assets from less than $1 million to as much as $75 million. The research also included two focus groups with plan advisors.
Research for the firm’s “A Winning Combination” study included presenting plan sponsors with a handful of different retirement plan advisor “personas,” each with a distinct value proposition, and asking them to choose what combination of values would be most helpful in managing their plans. Overall, plan sponsors say they prefer to work with a plan advisor whose value proposition emphasizes three specific elements:
- Employee Education: Employee education and advice is universally valued by employers, with many saying they want more frequent educational sessions for employees from advisors. However, advisors say employers are not always willing to make time for their employees to participate in educational meetings.
- Customer Service: Being responsive and accessible, listening and responding to needs and resolving problems are the keys to good service, plan sponsors say, with a plan review an especially important service.
- Reducing Costs: Plan sponsors want advisors to help lower the overall costs of the retirement plan, including negotiating with providers, reducing investment fees, and attracting more assets to the plan to keep costs low. The importance of costs was relative, however, as employers that did not currently work with an advisor emphasized costs more than employers that do work with an advisor.
This “winning combination” of values is especially important to smaller retirement plan sponsors with less than $25 million in assets, according to the study. Sponsors with $25 million to $75 million in assets confirm those values are important but say they have broader needs. Larger sponsors are more likely to want help from advisors with additional services and capabilities, including advice on plan design, investment selection, fiduciary support and help with other benefits.
Going Up?
“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,” said Mathew Greenwald, President of Greenwald & Associates, which conducted the study. “Advisors who can clearly articulate their value and differentiate themselves from their competition have a real edge in the marketplace.”
The study polled 565 employers that sponsor retirement plans, including 449 that worked with an advisor and 116 that did not, with retirement plan recordkeeping assets from less than $1 million to as much as $75 million. The research also included two focus groups with plan advisors.
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