Advisers Must Change to Win More Business

A survey of retirement plan advisers (called “consultants” in the study) said they must make changes if they want to increase sales and retain more business. 

Among the topics examined in the “2012 Perspectives Study: Retirement Plan Consultants” from Oculus Partners were: consultant business models and practices; current issues driving plan sponsor searches for a new provider; and the most important criteria for consultants’ recommendation of a provider and an investment solution.

Most consultants are concerned that providers don’t understand how to create an effective sales and servicing partnership, and cite examples of providers who get it right when it comes to understanding how to team with them, either in selling a new prospect or managing an existing relationship.

Further, providers can make significant improvements in new sales opportunities, said the report, which found that almost all consultants surveyed “spend the vast majority of their time on performing ongoing services for their clients rather than in searches and other project work,” and that despite the use of varied mechanisms to acquire new clients, referrals from current clients and providers are the primary vehicle to find new clients.

Other sources of new business were targeted sales efforts, networking, unsolicited outreach, database searches and industry conferences.

The top differentiators consultants used were experience (55%), a firm’s brand and strength (35%), independence (35%), analysis and benchmarking (30%), investment research (25%) and holistic approach (25%).



Primary Influencers  

Consultants described themselves as having very close working relationships with plan sponsor clients. They are often the primary influencers of how the sponsor thinks and acts. This is true for provider selection and satisfaction, plan design, investment selection and participant programs.

Consultants surveyed prefer that a relationship manager rather than a salesperson head the final presentation so that the chemistry between the relationship manager and prospect can be determined. They also offered insight as to how defined contribution investment only (DCIO) providers are pressuring bundled providers to use “more finesse” when it comes to selling their investments.

Other areas of focus in the study were: practices of providers during the selection process;

consultant perceptions of providers’ strengths and weaknesses; service demands and preferences; plan success goals and cost considerations, and current trends in plan design, reconfiguration of plan features, restructuring of plan investment options, qualified default investment alternative (QDIA) usage and plan cost management mandates.

The study surveyed 20 consultants from 18 firms, responsible for more than 200 searches (as a group) in 2012. Phone interviews were conducted between late October and early January.

The study, from Oculus Partners, based in Atlanta, is available for purchase at the firm’s website.