Guide Outlines Opportunity in DB Trends

A new defined benefit (DB) service provider guide, developed by The Principal Financial Group, explores best practices for advisory firms to engage and win new DB plan clients.

The service provider guide is designed to help financial advisers take advantage of the significant funded status improvements experienced by many DB plans over the last several years. Even with a muted start to 2014 for public and corporate DB plans, researchers at The Principal predict many plan sponsors are considering ways to lock in recent gains (see “S&P 1500 DB Plan Funding Decreases Again”).

A significant change in plan strategy often triggers a search for a new service provider, The Principal says, implying that financial professionals who can break into the search process have a significant opportunity to showcase their value.

“Searching for a new DB provider is very different from a defined contribution (DC) provider search,” explains Janet Kubik, assistant vice president of retirement and investor services at The Principal. “We developed this guide, based on more than 70 years in the DB market, expressly to help support financial professionals in leading plan provider searches. This allows them to further demonstrate their value and help DB clients accomplish their goals.”

The step-by-step guide identifies tips and considerations that are unique to DB plan provider searches and includes sample, non-branded resources that can be customized, such as:

  • A fact finder to ensure accurate information about the DB plan;
  • Plan assessment to understand the plans strengths, weaknesses and priorities;
  • Fee assessment to help evaluate total soft and hard dollar costs;
  • Search evaluation criteria and sample request for proposal questions; and
  • Finalist scorecards to more easily identify which provider is the best fit.

The guide is part of a new set of DB prospecting resources available online from The Principal to help financial professionals expand their DB businesses. The resources include talking points to help guide DB conversations with plan sponsors and a series of DB prospecting campaign communications to help engage sponsors more easily.

Additional research and analysis is available at The Principal Knowledge Center.