October 23, 2023

How to Stand Out in an RFP

Do you want “a seat at the table for the finals,” as Greg Middleton puts it? Increasingly, advisers are being asked to answer requests for proposals. “We’re living in a new age of RFPs—everybody’s doing [them] now,” says Middleton, senior director, marketing at CAPTRUST in Raleigh, North Carolina. Advisers, thus, have a new element to navigate in competing for plan sponsor clients, he says.

Reported by Judy Ward

According to experts, five differentiators are key for helping an adviser stand out when replying to an RFP.

1) Navigating today’s RFP processes effectively.

Middleton considers this one of the most important differentiators currently. “Can the adviser navigate the RFP process to not get kicked out of it?” he says. “Because more organizations are adopting a process to evaluate the potential hiring of a fiduciary adviser, you have a broader range of organizations doing RFPs, and their approaches have unique flavors.”

Advisory firms need to be able to adapt to different RFP processes and platforms for submitting a response, Middleton says. “For example, in some cases, you can talk to the key decisionmakers before putting together the response. In other cases, they say, ‘If you try to do that, you’ll be kicked out of the RFP process.’”

Also, organizations use different platforms for issuing their RFP, and some require a very quick initial response, such as within two business days. Some advisory practices may have prepared only boilerplate answers that exceed a platform’s response character-limit, so they have to scramble to rework the responses to fit, Middleton says.

As RFPs increase, and the need to navigate the RFP process effectively intensifies, having a specialist RFP response team is becoming more common among advisory firms, says Jeff Gratton, managing director at SageView Advisory Group in Minneapolis. “We’ve had a team for 10 years, and it’s a major offloading of work for the advisers when you have a team that’s doing 90% of this for them,” he says. “We try to not give boilerplate responses on RFPs. We want to give customized answers, and that’s what our [specialist] team can do.”

2) Citing comparable examples of successful plan design changes.

“About 85% of the questions on a typical adviser RFP are [standard] and quickly separate out which entities can deliver those services,” Middleton says. “The other 15% are about the specific issues of that plan sponsor and plan. That 15% is your best opportunity to differentiate yourself, to say, ‘Here are our recommendations that we think would be best for you to achieve your goals for your plan,’ and ‘Here are examples of clients that are similar to your organization that we’ve taken similar steps with, and here are the results.’”

Being able to cite such examples “is a major differentiator,” Gratton agrees. Doing so could mean showing the impact of an employer match-formula change that could also work well for the prospect, or the results of a reenrollment done at a comparable employer. “I’m finding that the RFPs we’re responding to are very similar in the questions they’re asking,” he notes. “The way we try to stand out, without getting too far away from the questions they’re asking on the RFP, is to include specific, short case studies—with graphics if possible—on the results. That seems to resonate very well.”

3) Providing participant fiduciary advice, not just education.

Gratton sees growing sponsor awareness of the distinction between providing participants with education and with fiduciary advice, both of which SageView offers. “Plan sponsors have gotten very smart in understanding the difference,” he says. A generic question he increasingly sees asks which his firm can provide. “Three or four years ago, we wouldn’t have gotten that question. But now, plan sponsors are looking for advisers to give [fiduciary] advice to participants.”

It is important to explain in the RFP response how an advisory practice supplies that fiduciary advice. “In responding to an RFP, what you have is ‘translation risk,’” that whoever evaluates your submission at the prospect’s will misunderstand your capabilities, Middleton says.

“When an advisory practice says it can offer advice for participants,” he says, “sometimes that means the plan adviser will stay for two hours after the committee meetings and do one-on-one employee meetings. Sometimes it means the advisory practice has a call center of specialists who can give advice to participants anytime. And sometimes it means the participant advice is given by a third-party provider that has partnered with the advisory practice.”

4) Providing evidence of participant-level capabilities.

In the past, for employers running an RFP process, “this topic has been more of an add-on,” Middleton says. “Now, participant services are a primary focus of RFPs. So an advisory organization needs to have the ability to evidence in RFP responses its participant-level resources and delivery of advice: You need to provide evidence that the advisory practice can deliver on that employee support once the firm is hired.” Besides “be specific about service-delivery capabilities,” he also suggests the adviser give examples of participant services performed at similar employers and provide references of such employers that the employer-prospect may contact.

“You need to provide evidence that the advisory practice can deliver on that employee support once the firm is hired.”

“There’s a major shift going on: We’re finally getting real traction and commitment from plan sponsors on investing in participant services,” Gratton says. So, for SageView, he says, it is a differentiator that the advisory firm has a call center staffed with advisers who can give clients’ employees personalized advice about not only their retirement savings, but also their other financial issues, such as getting a mortgage or how to implement a living will. “People want that kind of help, and it’s not inexpensive [for an advisory firm] to implement,” he says.

5) Offering informative reporting on participant-level work.

“What is also critically important about all this advice to participants is reporting back to plan sponsors about the [results],” Gratton says. “We have an impact report that we give an employer, based on our custom CRM [customer relationship management] system.”

With so much focus on participant services now, Gratton sees that reporting capability as an important differentiator for advisory firms. “Our system will tell us things like how many employees called in to SageView, and we can tell the employer about the themes we’re seeing in our conversations, such as struggling with college debt or caring for aging parents. We put that data into a one-page summary report, which allows us to work with the employer to make decisions on what will have the most impact in our education and advice in the future. It creates the opportunity to have better, more informed conversations with a client.”