How Can Advisors Keep Plan Sponsors Happy?

What do plan sponsors look for in an advisor? What services do they need and value? At a March 20 session of the 2017 NAPA 401(k) Summit, a panel of plan sponsor execs pulled back the curtain.

Led by moderator Ann Schleck, Principal, Ann Schleck & Co., the panelists were Katie Drayo, Benefits Director for Cott Corporation; Matthew Gertzog, Deputy Executive Director, American Society of Hematology (ASH); and Gloria McCamley, Human Resources Director for the Association of perioperative Registered Nurses (APRN).

There was a sharp divide in the panelists’ philosophies toward providing benefits and their role in bolstering retirement readiness, a contrast with implications for what they need from an advisor.

At one end of the spectrum is Cott Corp., which Drayo said leaves retirement readiness up to employees. As an organization, she said, they don’t do anything other than providing retirement accounts and information. “The employee makes the choices,” she said.

Both McCamley and Gertzog said their employers have a more paternalistic approach. “Our view is evolving,” said McCamley of APRN, noting that top leadership had been resistant but the company now is “moving toward being more paternalistic.” Gertzog noted that “being paternalistic has a negative connotation,” but with the right approach it can be a useful tool.

This approach is part of the effort at ASH and APRN to help their employees to prepare for retirement, which for both is part of being an employer of choice and attracting top talent, as well as Millennials’ attention, while meeting the needs of their older employees who are edging closer to retirement. “It is very challenging to make the concept of retirement tangible,” said Gertzog. For its part, APRN seeks to “move the needle” on deferrals and participation in the plan among a workforce that has employees from four generations.

The difference in mentality toward benefits is explained in part by the industries of which these employers are a part and the nature of their business. Cott Corp. is a manufacturer that faces challenges related to its industry segment and market trends, while ASH and APRN are organizations serving health services professionals.

That colored their degree of concern over controlling costs, which in turn affects their approach to benefits — and what they look for in an advisor.

The relative importance of fees varies accordingly. Gertzog says that for ASH, fees need to be reasonable and market-driven, but that “at the end of the day, value is more important than cost.” APRN, said McCamley, is willing to pay slightly higher fees for the higher level of service they seek. “We want to maximize our time with our advisors,” she said, since “what they can provide us not our area of expertise.” Cott Corp., on the other hand, is more hands-on, and according to Drayo, they “still want to be involved.”

So what does it take for them to conclude they’re getting their money’s worth? Drayo is looking for a strong relationship. Gertzog and McCamley expect more, but also give an advisor a relatively high degree of latitude.

Gertzog wants an advisor that understands ASH’s business goals and that helps him ask the right questions and that “makes me smarter.” He also said they want an advisor to “never cut corners on service delivery” and that helps them in “moving along the continuum to meet our goals.”

McCamley also has high expectations, yet demonstrates patience. “We still expect a high level of service even though we’re smaller than other plans,” she says, adding, “Don’t avoid pushing the envelope on things you think will bring positive change.” Like Gertzog, she wants to know that the “needle is moving in the right direction” and says that “if you don’t meet goals on that by the end of the year, we’re not firing the advisor.”

And striking a note that other employers as well as researchers and experts have in other sessions of this year’s Summit, they want their advisors to remind them of what they provide. “Don’t assume what’s obvious to your is obvious to me,” said Gertzog. Similarly, Drayo remarked, “Don’t forget to remind us of what you’ve helped us accomplish.”

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