In Practice September 18, 2014

PANC 2014: Differentiating Your Brand

Ranging over a number of factors that impact branding and differentiation, panelists at the 2014 PANC in Orlando, Florida, discussed what builds a retirement plan adviser's brand.
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How best to develop a brand owes a huge amount to the pioneers of this business, who created brands where none existed, said Charlie Ruffel, founder and director of Asset International. The role of retirement specialist adviser has grown in a remarkably short amount of time, and created an extraordinary momentum for the industry. “The role retirement partners play is well understood,” Ruffel said, “and has changed our whole industry so much for the better.”

A live poll showed the vast majority of the audience (88%) at PANC said they specialize in retirement plans and use them as the core of their value proposition. Most (92%) said their value proposition includes services outside the three Fs (fees, funds and fiduciaries), and most (82%) said they believe their value proposition is unique, compared to their competitors, with the most consistent answer (54%) pointing to the firm’s service model as the thing that most sets it apart from the competition. Other factors included pricing, investment research capability and fiduciary services.

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“I do think brand matters, because it really is the outcome of the collective actions of what we do as a firm,” said Rick Shoff, managing director of CAPTRUST Financial Advisors. “What we do is our brand. It can have an impact on people that will influence other people—and it doesn't always happen when we are in the room.”

“It’s extremely important to differentiate yourself,” said Randy Long, founder and managing principal of SageView Advisory Group. “In smaller firms you are the brand. It’s the service model and the value you bring to individual clients.”

Being independent and conflict-free are still important, but they are the price of admission, Shoff said. “It’s harder to get in the game nowadays. Not every ticket gets you in the same seat. Plan sponsors definitely value not only that we are specialists, but that we have a proven and sustainable business, and we’ve been doing this for a long time.”

Shoff noted that reputation becomes even more important since the hiring process is now generally conducted through requests for proposals (RFPs). “Being able to demonstrate depth and stability really matters,” he said. “We get to the finals 82% of the time, and we win 60%—and a lot of that has to do with how the plan sponsors now view us.”

Bill Chetney, a panelist and CEO of Global Retirement Partners, said it wasn’t so long ago that plan sponsors asked if they even needed an adviser. That has certainly changed, and he feels the marketplace has fully embraced the need for an adviser and consultant. “But in order to differentiate yourself and position yourself, you definitely need to have an area of specialization,” he said. Simply being a retirement specialist is not enough. Specialization in 403(b) plans or 457 plans, or specializing in a particular region or city where the adviser has a number of other clients is necessary, Chetney said, “or some other connection that draws you together.”

The brand of the individual is just as important as the brand of a firm, according to Chetney. “People buy from the person in front of them,” he said.

Most important is the connection you forge with the committee or the folks you are presenting to, Long said. “A brand will get you in the door, but at the end of the day it’s you as an individual and your team that will get the sale.”

Shoff noted that the firm’s growth strategy involves finding and keeping clients, but just as important, he said, is recruiting other advisers and doing acquisitions—and brand plays a key role. “I think brand is more important when it comes to recruiting and keeping or winning advisers,” he said, noting that recruiting and acquiring a firm can be a tough decision. “I feel like the brand halo effect is more important than it is at the client level,” he said.

Chetney’s elevator speech to prospective advisers highlights the firm’s interest in independent-minded advisers and a brand that enables greater sales success. Shoff asks what makes them want to join CAPTRUST, and he uses the average growth in sales (19%) for firms that join as a selling point. Long said firms that want to grow their practice will be interested in SageView.

These days, the focus today is really more about your business, not your practice, according to Ruffel. The net result is what we see hear today,” he said. “In some ways, the difference between having a brand and having a practice is ambition,” he said. “It’s easier to run a practice when the winds are behind you.” 

Data & Research September 18, 2014

PANC 2014: Plan Sponsor and Participant Education

For industry executives on one panel at the 2014 PLANADVISER National Conference, retirement plan sponsor and participant education is a three-part effort.
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“Lesson one is maximizing deferrals,” said Chris Augelli, vice president for product marketing and business development at ADP. “Second is diversify, and third is measure and improve income replacement ratio. The job of the adviser is to ask: How can we deliver and measure and define all these things in a clear and digestible way?”

While it sounds like a simple enough program, Augelli and other panelists warned attending advisers that even conveying these three lessons to sponsors and plan participants is difficult. “For example, how do you define pre-retirement income?” Augelli asked. “Is it the last five years of the participant’s career? The top five years of income? Or do you average all the working years?”

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He pointed to the example of blood pressure testing and other highly standardized medical procedures as an ideal the retirement industry should strive toward. “You can go anywhere in the world and walk into a hospital, have your blood pressure checked, and get a number that means the same thing,” Augelli said. “We need to do something similar for retirement readiness metrics. We need to standardize the conversation and establish some true baselines to think about these issues.”

Beyond adding simplicity and standardization to retirement messaging, Augelli and other panelists urged advisers to work with recordkeepers and other service providers to produce customized education materials and to take a more holistic approach to offering advice directly to participants. Rocco DiBruno, another panelist and retirement group director at Thornburg Investment Management, agreed with that assessment.

“I did more than my share of enrollment meetings—today the demographics of the work force are so diverse by age and lifestyle and all the other factors,” DiBruno said. “As the adviser, you have to be able to customize the approach for individuals. One of your roles as the adviser is to make retirement real for them.”

DiBruno suggested advisers could partner with enrollment specialist resources commonly employed by recordkeepers to develop customized messaging for different demographic segments in each plan. Advisers can be even more effective by partnering with data-mining resources to identify specific problems that may be prevalent in a given plan—perhaps many participants display age-inappropriate asset allocations, or there could be a heavy concentration in employer stock. Whatever the problems are, advisers should also work hard to put systems in place to measure education-related outcomes and the progress of their plans as a whole, DiBruno said.

“At the end of the day, one of the biggest questions is: Can you document the results of your education efforts?” DiBruno asked. “You need to own that information and know how to present it and use it in the value-add conversation. That’s how you get on your way in this business.”

Scott Buffington, vice president for national sales at MassMutual and another member of the “Plan Sponsor and Participant Education” panel, underscored the point that all participants are different—so it matters that advisers customize their message to the individual's needs.

“It’s been said before, but we need to focus on the new way of doing things—we need to look at the Amazons and Googles of the world,” Buffington said. “It doesn’t have to get too crazy about how customized to get, because you’re ultimately delivering a similar message—get prepared for retirement—just folded into different packages. You don’t have to reinvent the wheel for each group.”

Buffington also stressed the importance of a holistic approach to advice, especially as employees’ overall benefits packages become increasingly complex and, at least in the case of health care, more expensive to maintain.

“Participants are telling us they are more and more confused about their overall benefits programs,” he said. “With all that’s happening in health care reform, it’s all become more confusing. So, we feel that providing advisers the tools to have a holistic benefits conversation is essential for the industry to move forward in the ways we are discussing. You don’t have to be an expert on health care, or on life insurance, but you do need to understand the participant’s hierarchy of needs.”

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