In its 2013 annual report on advisors’ satisfaction and loyalty with record keepers, DCP and Boston Research Group identified the factors that matter most to advisors when deciding where to place business. Though there are a variety of factors, the wholesaler emerges as playing a dominant role. No surprise there. But the study also identifies specific behaviors by the wholesaler that are the most effective in keeping the advisor happy and coming back. Here are the top three.
1. Accessible, Available and Responsive
The first wholesaler behavior might seem like basic blocking and tackling: the wholesalers’ being accessible, available and responsive. One might think this is obvious. However, only 60% of advisors are “very satisfied” with their wholesalers in this regard. Doing it with excellence is a lot easier said than done. And our models say it should be Job #1.
2. Easy to Work With
The next factor is closely tied to the wholesaler: Making it easy to work with the record keeper. While this is a sum-total effect of a record keeper’s staff, programs, pricing flexibility and products, this is largely demonstrated or enhanced by the wholesaler. In a very real sense, it is the customer experience delivered by the recordkeeper to the advisor. If the record keeper makes working with them easy, it frees up the advisor to do other things, like building the profitability and size of the practice. Unfortunately, only about half of the 400 advisors polled (55%) could give their best record keepers top marks in this area.
3. Expertise and Thought Leadership
The third most compelling attribute of a wholesaler is their expertise in the retirement industry. Wholesalers do better in this area, with 73% of advisors giving their wholesalers a “very satisfied” rating. But expertise goes beyond knowing the rules and regs — it includes an element of thought leadership.
Bear in mind that thought leadership is not just providing information. Many behavioral economists define it as providing information that makes one think differently about a familiar topic and changes one’s behavior. Applying that standard, few ideas actually rise to the level of thought leadership. In fact, despite record keepers’ giving advisors a lot of industry data, fewer than half of the advisors (47%) “strongly agree” that their record keepers are thought leaders. That’s an astounding 26 percentage point difference between industry expertise and thought leadership. (Interestingly, “Building Your Brand Through Thought Leadership” is a top topic in NAPA Net’s poll of future NAPA webinars — see the poll box in the right column of this page.)
Pricing and Fees
Of course, other factors beyond the wholesaler are powerful in driving advisor satisfaction and loyalty. Specifically, factors related to pricing and fees affect the advisor. These factors are:
• Pricing flexibility to allow the advisor to compete effectively (44% “very satisfied”)
• Fee and cost transparency that is easily understood by plan sponsors (43% “very satisfied”)
• Strong program for repricing of existing plans to keep them at current competitive market levels (27% “very satisfied”)
Note that advisors’ satisfaction rating on each of these variables is well below 50%.
The combined impact of these factors, however, is far less than the influence of the wholesaler in perpetuating a strong, loyal, profitable relation with an advisor. Quality of the marketing materials and fund performance round out the list of drivers, but are relatively weak drivers compared to the wholesaler.
Top-rated Record Keepers
So which record keepers are above the norm, overall, in terms of satisfying the advisor? In alphabetical order, they are:
American Funds
Charles Schwab
Great West
Mass Mutual
Nationwide
Putnam
OneAmerica
Standard
Transamerica
What are your thoughts on all this? Use the comment box below.
