The Value of an Adviser

Again this year, we compare plans that have the benefit of an adviser with those that do not, to determine the value added by retirement plan advisers and consultants. The results are gratifying, proving that these professionals do bring significant capabilities to retirement plans and participants.

However, advisers unmistakably need to take notice: When it comes to the actual data points that measure plans with an adviser against those without one—i.e., average and median balances, and deferral and participation rates—advisers have made no appreciable difference. In fact, plans with an adviser are in a dead heat with, if not slightly worse off than, plans that have no adviser. This is a clear-cut indication that advisers need to put retirement readiness at the center of all they do and work much harder to bring better results.

Proving their value is something that resonates with our 2014 PLANSPONSOR Retirement Plan Adviser of the Year finalists; you can read Q-and-A’s with them. This year’s impressive class is as passionate as ever about helping participants prepare adequately for retirement, and all have undertaken a variety of noteworthy initiatives to improve plan outcomes, including reducing fees and educating employees, sometimes via one-on-one meetings. Not surprisingly, many use automatic enrollment and automatically escalate deferral rates each year, to ensure their participants will be able to replace 70% to 90% of income in retirement.

At some point, it may become necessary to expand your team; the question of whether to grow organically or through a merger, acquisition or partnership is covered in our Practice Management story, “Executing Firm Growth.” The “inflection point”—when an adviser feels the need to bring on additional resources—varies for each firm.
Additionally, “Right Size,” in our Servicing Strategies department, looks at the specific needs of micro (less than $5 million), midsize ($50 million to $500 million) and mega ($1 billion and larger) plans. All of these articles contain valuable information that should help you set further goals for 2014 and strengthen your practice.

We introduce a new department in this issue, titled “Data Points.” Here, Quinn Keeler, senior vice president of research and surveys, and Brian O’Keefe, director of research and surveys, will take a deep dive into the valuable data they cull from our proprietary research, to provide their insights, analysis and perspective as to what the data mean. In their inaugural piece, to complement the “Making Strides” adviser value story, they look into how much better off participants are who consult an adviser versus those who do not. Interestingly, at every age, individuals in the former group are more likely to have saved at least $100,000 for retirement.