Adviser Marketing and Service Evolve With Plan Sponsor Demands

Elite retirement plan advisers are using new and proven tactics to meet the growing demands of plan sponsors in an evolving industry. 

The ongoing implementation of the Department of Labor (DOL)’s fiduciary rule is reshaping the defined contribution (DC) adviser landscape, but some analysts say the space has been undergoing substantial change for quite some time.

Tom Woods, senior vice president of sales at Fidelity Investments, says he’s seen the role of advisers change significantly in the last few years. Woods observes advisers moving away from focusing on evaluating funds for a plan’s lineup and mitigating fiduciary risk. They are expanding the scope by offering a broader set of services to keep up with plan sponsor demands. These include playing larger roles in plan designs, educating and advising participants, and working with other plan stakeholders in a more strategic manner.

He says services pertaining to financial wellness and health savings accounts (HSAs) are also appealing more to plan sponsors today.

“Plan sponsors are more and more inquisitive about these things and looking to advisers for guidance,” Woods says. “This presents tremendous opportunity to differentiate yourself from someone who may be only focused on lowering fees and selecting investments.”

Donn Hess, senior vice president, Lockton Retirement Services, observes a similar trend. While he notes there’s still a great demand for basic adviser services like mitigating fiduciary risk, especially in light of ongoing litigation in the space, he sees a growing demand for advice on programs around executive benefits and financial wellness.

“Financial wellness is such a huge topic and has so many moving pieces,” Hess explains. “I think a lot of clients are turning to their advisers for help in defining what their issues are and then narrowing the scope of the solutions and providers available.” But given the industry’s heightened scrutiny on fees, sponsors also want the price tag for these services to remain relatively low.

NEXT: Competing on more than price 

“As we have seen with defined contribution (DC) recordkeeping platforms, we’ve also seen fee reductions impact advisers, and their clients are expecting them to do more today than ever for the same or less amount of money, and that’s a real challenge,” Woods explains. He believes slashing fees alone won’t allow advisers to stand out, whether they’re independent or connected to large firms. “Advisers need to clearly define their value proposition,” Woods says. “Some make the mistake of just cutting fees and competing on price alone.”

Woods sees the more successful advisers taking advantage of traditional marketing tactics such as maximizing referrals and leveraging centers of influence. They are also exploring non-traditional territory such as social media and even automated marketing.

“I think over the past five years, there has been a significant effort by a very small number of retirement focused advisers to take advantage of digital tools and social media marketing,” Woods explains. “Those willing to invest in a consistent approach are having success.”

When it comes to social media, an effective marketing strategy needs to be proactive and carefully controlled. Woods sees advisers benefiting from targeting specific clients, growing relationships, and strategically asking for referrals. Woods says some advisers send out lists of companies they’re interested in working with to clients they’ve developed good relationships with, asking for personal introductions via LinkedIn or another network. Some advisers are even leveraging Facebook to target potential clients and foster deeper personal connections.

“Advisers have been very effective in leveraging their Facebook presence to make contact with a targeted audience,” Woods says. “What I hear is that it’s a much more personal relationship that can evolve. These advisers are very mindful of the profile they have on Facebook and the connections they have to make sure they’re delivering the right image. Clients can also see pictures of their families and personal interests.”

Hess says social media is serving as a reference for prospects to validate advisers’ expertise. He says it’s a great platform to showcase thought leadership pieces.

NEXT: Traditional centers of influence 

Jamie Bentley, PIMCO’s senior vice president and national retirement sales manager, says advisers are still seeing success in developing relationships with traditional centers of influence. These include CPA firms, auditors, ERISA attorneys and third-party administrators (TPAs).

He says advisers have also benefited from hosting local seminars offering plan sponsors continuing education credit, while providing insight on topics most pertinent to their plans.

“This allows the adviser a forum to establish their credibility as a retirement plan expert and helps them to build a base a quality plan sponsor prospects,” Bentley says. “In many cases, advisers use third-party marketing and event planning firms to help with the logistics.”

Hess says Lockton has had success with recent summits and webinars on avoiding DC plan litigation, a topic that some of its university clients have reached out to the firm to learn more about.

Bentley notes that levering recordkeeping and asset management partners for lead generation support is also popular. This tactic is similar to what Hess calls relationship marketing, where he’s seen the most growth. In this case, retirement services firms reach out to other lines of business within their parent company for referrals.

“As the benefits industry becomes more sophisticated, clients are looking for advisers who are part of a network that can bring a more holistic solution,” Hess concludes. “So if I’m working with an adviser that knows people with expertise in health and welfare, that’s going to make the retirement advice more robust and they’re going to help you solve more problems.”

While this is an advantage for larger firms, independent advisers and smaller firms still have several options. Hess notes that individuals tend to more heavily leverage social media presence, webinars and other tech-driven strategies. Many small firms are also partnering with larger ones.

“Specifically, teams that are more individual wealth-focused but who have a small number of retirement plan clients are encouraged to partner with teams who are more solely focused on retirement plans,” Bentley says. “The idea is that bringing in a deeper level of retirement plan expertise is in the best interest of the plan sponsor client.”