In Practice October 9, 2009

PANC 2009: Provider Services Increase an Adviser’s Value Proposition

For advisers hoping to build out their businesses, recordkeepers and investment providers can provide a host of services and programs to help, according to a panel of retirement plan advisers and providers at the PLANADVISER National Conference.

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Recordkeepers, such as ING, can offer advisers data they need, said Stephen Davis, national vice president Mid Market Sales at ING, For example, he said, participant data can help advisers determine how they can add value to their retirement plan relationships. Having the recordkeepers noted that so they will not have to add staff.

Elizabeth Wilson, managing director-national sales manager at RidgeWorth Investments, said RidgeWorth is a defined contribution investment-only (DCIO), and those types of providers can provide advisers with information on productivity and expanding their client base. As an example, she said, RidgeWorth recently offered seminars for advisers on how to use LinkedIn for networking.

Chris Augelli, vice president, Alliance Programs and Business Development, ADP Retirement Services, pointed out that there is such diversity in what providers offer that it is good marketing of their different specialties to partner with good advisers. He said ADP offers opportunity to advisers because of the number of clients it has to refer to advisers.

As for what advisers want, Kendall B. Storch, SVP, Retirement, Longfellow Benefits, said advisers want to be as efficient as possible, providing the best service without spending too much time. Data is a huge need, he said. It is useful for building educational campaigns, benchmarking clients' plans, and letting clients know new ideas/trends to try. Practice management training, often from DCIO firms, is also helpful, he said.

In addition, according to Storch, advisers use providers as an eye into the competition, to know who is doing what and what has been successful, and also to gather examples from others who have tried something an adviser may want to try.

All panelists agreed there are no demands or set expectations of advisers from providers, but Wilson noted that "vendors take care of advisers that take care of them."

Both providers and advisers should stay unbiased in their referrals to clients. Storch pointed out that the way to stay unbiased is to keep the needs of sponsor clients and participants top of mind.

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In Practice October 9, 2009

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?

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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.

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