PANC 2009: Advisers Strive to Customize Participant Education

Retirement plan education delivery is moving away from the vendor—representing a big opportunity for plan advisers, noted panelists at the PLANADVISER National Conference.

Education “cements the relationship with the plan sponsor,” said Joseph McLaughlin, vice president and senior institutional consultant with the Kelliher Group at Morgan Stanley Smith Barney. Phil Flore, senior vice president and institutional consultant at UBS Wealth Management, agreed that it is a huge opportunity for advisers, and sponsors are demanding more education. “They want more fundamental, dynamic education,” he said.

From the provider perspective, Heidi Walsh, vice president and director of Intermediary Relations at T. Rowe Price Retirement Plan Services, Inc., sees more collaboration with advisers. Further, advisers want to do more high-touch education, such as targeting different audiences (see “Zooming In”). Walsh said T. Rowe has access to data points about participants and can leverage that data into an educational strategy.

Walsh suggested advisers start by mining the data and look for particular segments of participants that might need to ramp up their behavior, such as in savings or deferrals. Advisers can then use the providers’ materials to customize education for a particular employer or participant segment. Walsh said she sees a movement toward less vendor-driven education; rather, advisers are taking provider materials and adding their own custom layer. “We’re just the production company behind the scenes,” she said.

McLaughlin uses the provider to leverage his educational strategy. He said advisers can work with the recordkeeper to segment data and then design a relevant communication strategy to deliver to segments of participants. He uses the vendor’s materials and also adds a lot of customization.

However, customizing every single material can seem pretty daunting and uneconomical. Chad J. Larsen, president at Moreton Retirement Partners, a National Retirement Partners (NRP) member firm, is a big proponent for employee education and does hundreds of participant education meetings a year. “We do a lot of employee education, so we don’t customize every single presentation,” he said. He does, however, try to customize materials for each company so they look and feel comfortable for the particular group of employees.

One technique Larsen uses is keeping it simple and fun. “If the employees aren’t laughing … We missed the point,” he said.

A possible hurdle for advisers is figuring out how to get paid for providing education. However, it does not have to be a hurdle because many sponsors will pay extra for education, the panelists said. McLaughlin said he builds in the number of manpower days for education into the fee to the plan sponsor, and has recently found a way to include the cost of travel. “We find that clients who want education and want it delivered by us as opposed to the vendor are more than willing to pay for that,” said McLaughlin.