Citing the Vision 2006 Study, Ann Schleck told attendees at the National Retirement Partners Conference in California last week that when advisers were asked what their value proposition is, the two most common responses were independence and dedication to the retirement business. If everyone cites the same things as their value proposition, she said, it is not a differentiator.
Therefore, she told advisers that they should think about their value propositions on a firm level, a team level, and a personal level. Further, she commented, advisers should show their clients the specifics of their value propositions. For example, Schleck said, if you say you have a high touch service model, show the plan sponsor exactly what types of interactions will occur throughout the calendar year.
Niche markets are another area that advisers should examine, she said. Instead of thinking of yourself as a retirement plan specialist, look beyond that and drill your target market down further, she suggested. Advisers can specialize in a particular plan demographic, or a type of firm, a plan size, or something else that happens to work as a specialty.
Advisers are being transformed from sales people to consultants, she said, and plan sponsors have increased interest in working with advisers. As part of the process of working with sponsors, Schleck predicted that there will be an increased emphasis on plan analytics and less focus on investment analytics. Although investments are important, she said, the best advisers will become better versed in plan design and features and compliance issues. The opportunity exists in helping plan sponsors manage risk – for example, helping a client prepare for an audit, she noted.
Also as part of this movement, there will be an emphasis on outcomes. Schleck suggested that a good practice for advisers would be to complete a personal return on investment (ROI) to give to clients. In the ROI, the adviser should show the positive outcomes they have been able to effect, including things such as changes in plan design, and increases in the participation and deferral rates, among other things. This way, the plan sponsor gets a document showing the value of working with the particular adviser.