Training New Plan Sponsors is Key

Research done by Anova Consulting Group shows how properly training new, small-market plan sponsors is imperative for advisers and plan providers to achieve client satisfaction. 

The survey of 875 plan sponsors shows that new, small-market 401(k) plan sponsors (those that have been in the role for less than a year and have less than $10 million in assets under administration), are more than twice as satisfied with their providers as those who did not receive adequate training. 

Richard Schroder, President of Anova, told PLANADVISER that financial advisers need to be aware that any kind of training they give to a plan sponsor is beneficial; whether it’s as simple as a phone call to inquire if they have any questions, or as involved as a full-blown seminar for participants–any personal connection at the start of the relationship can go a long way.  

Schroder also emphasized that the sooner this training can be done, the better. 

“If you can get that sponsor up to speed quicker, they will have fewer questions down the road.  They might start to do paperwork wrong, have compliance issues, et cetera, and eventually it means more problems for providers and advisers down the road,” he said.  

Advisers need to remember that specifically for a small-market plan sponsor, handling retirement plans is a very small part of their responsibilities; it’s up to the adviser to bring the topic to their attention. The sponsor needs to be aware of what kind of training is available to them. Schroder pointed out how the industry is constantly developing new features intended to make the job of being a plan sponsor easier; and while those products and innovations may be useful, they cannot replace proactive outreach, Schroder believes.  

And perhaps the most relevant bit of research found by Anova – if a new plan sponsor does not feel he has the support from an adviser or a plan provider – another adviser can easily swoop in and offer to help sort through the process.  The retention rates of advisers who take the time to train the plan sponsors is much greater than those who don’t have that connection.