PANC 2009: Convincing Plan Sponsors They Need an Adviser

In the days of automatic enrollment, automated contribution escalation, and asset allocation funds, is it difficult to convince plan sponsors they still need a financial adviser for their plans?

Michael Brown, partner, ClearPoint Financial, told attendees at the PLANADVISER National Conference in Orlando, Florida, that the move to automation has made things easier for sponsors and participants, but because of those trends, advisers are increasingly needed to provide fiduciary services, fee reviews, and compliance help. He suggested advisers listen to clients to determine their need, show them the full menu of services offered, and let them pick.

Ongoing due diligence at every level is the value of a financial adviser, said Anthony E. Cristiano, vice president, wealth advisor, Morgan Stanley Smith Barney. Advisers should point out that they will work for the prospective client to find out the best vendors and investments to meet sponsor and participant needs. Sponsors may not know what they need and advisers can look to plan and participant data, to find gaps, he said. Another way to find out what area of the plan may need to be addressed is to determine what the majority of participant calls are about, he said.

Patrick Oberlander, executive director of Corporate Retirement Plans, UBS Financial Services Inc., suggested advisers find out if prospective clients know what they are really paying for vendor services and point out that an adviser can find out if there are any undisclosed plan fees and make sure they are getting the best bang for their buck.

Selling Points

For advisers affiliated with a big name firm, Oberlander said the size and strength of the firm is a big selling point. Offering unconflicted participant advice, no revenue sharing arrangements, open architecture investment platforms, and fiduciary services for a fee will also attract prospective clients, he added.

For independent advisers, Brown said the lack of size and a personal touch are selling points. In addition, the ability to work with any investment platform shows an unbiased advocacy, and having a team of advisers offers a competitive advantage not only because of the ability to cover each other, but because of the various skills and expertise each team member can bring to the client.

In the end, though, it all comes down to attitude, according to Brown. "Clients can sense passion," he said.