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4 Things Your Plan Sponsor Clients Should Know

Why did your plan sponsor clients hire you? Why do they retain your services?

“Trust” is commonly cited as a primary reason. I would imagine most of them would also cite your experience and your expertise, perhaps the credibility or brand of your firm, and they’d almost certainly talk about the time and money that your involvement has saved their organization.

But in talking to plan sponsors over the years, I have found that there are certain things that the best advisors routinely share with their plan sponsor clients. 

How You Measure Success

Not every plan (or plan sponsor) has a well-defined measure of plan success. But a growing number do. These days, those measures are likely to be traditional ones, such as participation rates. But that’s hardly a defining marker for a retirement plan advisor in a world where a growing number of plans have embraced automatic enrollment. The best advisors set benchmarks for themselves and the plans they work with that go beyond the basics. After all, what gets measured … matters. 

If you can’t clearly state what your targets are, why they are important, and how your client base stands in relation to those targets, you’re probably using the wrong benchmarks. 

How You Stay Current 

Ours is a complex and ever-changing business — one that many plan sponsors are ill equipped to deal with (certainly in addition to their other daily responsibilities). They rely on their trusted advisor not only to know what they need to know, but also to be able to share that information on a timely basis. The best advisors read, attend conferences and/or informational webcasts, have attained (and maintained) applicable designations, and commit to a regular course of continuing education during the course of the year. 

This business is constantly changing. If you’re not constantly learning, you — and your clients — are being left behind.

How You’ll Help Their Plan Be Better

If your success measures and expertise are going to matter, they have to be applied in a practical and tangible way to the specific needs, challenges and opportunities of each plan you serve. That means being able to understand those unique challenges, craft effective solutions and then work with your plan sponsor clients to make those solutions a reality. And not just at the outset of the relationship, but on an ongoing, proactive basis.

How — and How Much — You’re Paid

A primary fiduciary responsibility is to ensure that fees paid for services rendered are reasonable. However, you can’t evaluate whether a fee is reasonable if you don’t know how much it is. If your plan sponsor clients don’t know what you do, how you’re paid and how much you’re paid — well, how can they justify your fees as reasonable?

How would your plan sponsor clients answer these questions about your services?