Wouldn’t you love to be a fly on the wall at the plan sponsor defined contribution (DC) committee meeting where members discuss request for proposals (RFP) responses and decide who gets invited for final presentations? Or, likewise, for the same committee, as its members deliberate once final presentations are complete? Here’s the inside track to what happens during those conversations.
One of the most common misses by advisers is using one answer in a variety of possible RFP questions: “We’ll customize a solution to fit your needs.” While it appears to send a message of broad capabilities, great service and flexibility, it is entirely too vague. The committee reads this response and sees nothing more than a lump of clay. Its members understand nothing more about you than they did before reading the RFP response.
In our experience, to better communicate your unique capabilities, you need to do two things. First, provide a case study example and, second, provide a proposed starting point for your solution. A case study with results and hard numbers makes your potential solution more of a reality.
Here is an example: “For a client similar to yours, 65% of participants that attended our education session increased deferral rates by at least 1%.” Then follow your case study with a potential starting point for your solution. Example: “We would propose beginning with a survey to evaluate how many employees are using the current wellness program. After this survey, etc.” Bring your solution to life!
The committee will notice the degree to which you customize your RFP response. Your submission needs to be a personalized response, not just a simple copy and paste from your RFP answer bank. A custom cover letter is not enough. The degree to which the plan sponsor feels you are responding specifically to its RFP does make a difference. The team will notice it and will also discuss it.
The organization and readability of your response is also critical. As you write the RFP response, you may take it for granted that you know how to locate all your references, tabs, exhibits, illustrations and appendices. The same may not be true for the person who will read it for the first time, and that person may also misunderstand ambiguous or unclear responses. While it may be time-consuming, a peer review is well worth the additional time and effort, if only to double check organization and readability.
And the peer review will serve a second purpose. Almost every plan sponsor will have one or two committee members who notice every typographical error. A typographical error is viewed in most cases as a lack of attention to detail, which could then be extended to imply a potential lack of attention to detail in Employee Retirement Income Security Act (ERISA) fiduciary duties.
People also notice professional printing and graphics. If your RFP submission or final package looks like it was prepared using only basic word processing skills and possibly an inkjet printer, then the plan sponsor will take notice. Whether a hard copy or electronic submission, make sure it looks professional. If your firm is not large enough to have its own in-house marketing and graphics support, you might need to come up with a way to make sure you don’t look “too small” because of your print graphics and marketing material.
Finally, most RFPs will include a question that you should welcome: “What differentiates your firm from your competition?”
But so many advisers drop the ball here. It is critical that your answer actually “differentiates” and makes you look unique. If your answer to this question is something anyone else could use, then you need to change it. Example of a poor response: “What makes us different is our people and our commitment to service.” Anyone could give this answer. If you use this response, you are no different than anyone else. If you want a plan sponsor to notice you as “different,” then the answer to this question needs to be uniquely yours.
Eric Dyson is the executive director of RFP 401k Advisor and acts as an independent search consultant for plan sponsors.
This feature is to provide general information only, does not constitute legal or tax advice and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services Inc. (ISS) or its affiliates.