Many advisors view HR and benefits managers as obstacles to overcome to get to decision makers like the CEO or CFO. To the “Triple F” advisor focused on fees, funds and fiduciary — a.k.a., costs, liability and investments — the HR manager offers little value. But for plan advisors focused on outcomes and people, the HR manager can become a valuable ally and even an internal sales champion.
Most HR professionals wear many hats, dealing primarily with health care and wage/compensation issues. For many of them, DC plans have been an add-on which most know little or nothing about and have limited formal or informal training on. They know even less about investments.
Sound promising? Read on.
HR and benefits managers know, and care about, their employees. Today, with most 401(k) money going into professionally managed investments like TDFs, understanding employee demographics and behavior is more important than picking the next hot fund. HR people can be most helpful and interested in creating a plan design that meets the profile of their employees while satisfying the needs of the company to limit cost, work and liability. Which means that HR people are more critical to what really matters: outcomes.
Why should plan sponsors care about outcomes? Here’s where the alliance of the plan advisor focused on value and the HR manager becomes so important. Outcomes should matter to plan sponsors because older employees who cannot afford to retire cost more and limit opportunities for younger workers. Retirement is critical to a company’s most precious asset: people. A highly functional retirement plan relieves stress and attracts better talent.
HR people struggle to show their value within the company because they do not make or sell anything. The plan advisor who leverages the HR person, helping them demonstrate their value to their CFO and CEO, in turn is able to charge more because of the value they add beyond fees, funds and fiduciary.
So if you think HR stands for “human roadblock” as some advisors believe, think again.
