PANC 2015: Surveying Your Clients

Executives discuss the key questions advisers should ask plan sponsors every year.

The information that advisers can glean from client surveys can boost profits very substantially, suggested Tim Seifert, vice president and national sales manager at Lincoln Financial Group, speaking at the 2015 PLANADVISER National Conference in Orlando, Florida. 

Seifert joined other experts on a panel session exploring the theme “Surveying Your Clients.”

Fidelity Investments has been surveying plan sponsors since 2008, said Derek Wallen, senior vice president and head of defined contribution investment only sales at Fidelity. He said Fidelity focuses on plans that use an adviser and uses a third-party research firm to conduct the surveys, not identifying Fidelity as the survey sponsor, he said.

Advisers might want to consider asking the same questions that Fidelity poses, Wallen said, starting with, “Are you looking to switch your adviser?” In Fidelity’s latest survey, 17% of sponsors answered in the affirmative. Next, ask why, he suggested. Fidelity discovered that 43% of these plan sponsors are looking for an adviser who is more knowledgeable about DC or DB plans.

Drilling down further, panelists said, plan sponsors are looking for an adviser who offers proactive suggestions for improving plan performance. Sponsors also want an adviser that proactively consults on plan design, fiduciary responsibilities, investment option selection and monitoring, cost minimization and regulatory changes, Wallen said.

“There is also a value in asking the same question over several years to see a trend,” Wallen added.

NEXT: Focus on investments

“The number one reason plan sponsors use an adviser is investment expertise, so ask them about that,” Wallen said. “Ninety-seven percent of plan sponsors review investments at least annually. Eighty-three percent of advisers provide investment advice or guidance to participants. Eighty-nine percent of sponsors say it is acceptable for their adviser to provide investment advice outside the plan, and 63% say an adviser’s willingness to take on formal fiduciary duties is very important.”

Finally, Wallen suggested that when surveying clients, “aggregate the results of your surveys to learn about your whole book of business, and consider tying in survey results to bonuses.”

Lincoln Financial’s top adviser teams spend one hour a week surveying clients, Seifert said. He said it is a five-step process: 1) determine your focus; 2) decide on the methodology, whether you want to conduct informal interviews or a formal survey; 3) create the questionnaire; 4) send a pre-survey invitation and then go live; and 5) evaluate the data and identify areas to improve your practice.

Nine key areas Lincoln Financial’s advisers explore, instructing sponsors to rate their performance on a scale of one to five, with five being the most favorable, Seifert said, are: 1) about their perception of the business relationship; 2) the professionalism of the business practice; 3) the standard of the support staff; 4) their financial knowledge; 5) their understanding of the sponsor’s needs; 6) their implementation of solutions; 7) the range of their financial services; 8) the effectiveness of their communication; and 9) their satisfaction with the adviser’s financial review process.

NEXT: An adviser’s point of view

The D’Aiutolo Institutional Consulting Team at UBS Financial Services does not conduct formal client surveys because it serves 120 401(k) plans with 150,000 participants and “each client is different,” said Paul D’Aiutolo, institutional consultant. 

“Instead, we hold roundtables with plan sponsor clients,” he said, “sometimes including the recordkeeper, and we conduct informal surveys at every client review.”

The first question D’Aiutolo commonly is interested in learning about is: “How important is the client's 401(k) to the wider business?” Next, he asks, “What services matter most? Governance, plan health or outcomes?” The third question he frequently asks is, “Would you be willing to give us a reference?” Fourth: “What might prompt you to select another adviser or recordkeeper?”

“Surveying is important for advisers,” D’Aiutolo said. “It will inform you whether or not your services are what they are looking for, and whether or not you will be able to keep that revenue stream. Of course, there are risks. If you ask them about services that you are not providing to them but that they would want, the client could find reasons to benchmark you, which is why it is very important that you follow up on what you learn.”

But the benefits cannot be overlooked, D’Aiutolo said. “Surveys and even informal discussions deepen relationships and uncover concerns. They can also lead to new services that can add great value,” he said.