Hundreds of millions of dollars are spent on supplying advisors and broker dealers with value-added services and tools for free by providers. But what’s their impact? A new study by Chatham, led by Josh Dietch in collaboration with Bruce Harrington and Greg Melton, set out to answer that question through surveys with advisors, DCIOs, record keepers and broker dealers. The study ranked the top providers and created a loyalty index. Though having value-add does create awareness and can differentiate a provider, generally it is most effective in opening doors and breaking a tie.
Of the five types of services, generating leads was clearly the most highly valued, followed by thought leadership, participant and plan sponsor engagement, and practice management. Broker dealers value practice management to help them build a robust platform for current advisors and recruits. Advisors value lead generation and tools that help them build a practice.
The top DCIO value-add programs include:
- American Funds
- JP Morgan
- BlackRock/Vanguard (tie)
- Fidelity/ John Hancock (tie)
Record keepers include:
- Principal
- Fidelity
- Transamerica
- John Hancock
- Great West
Value-add services currently under development focus on practice management, participant engagement and measuring plan success. And here’s some wisdom for providers from Dietch and Harrington:
- Be selective on the advisors that get your value-add.
- Make the services easily executable.
- The value should have some connection to the services offered, like JP Morgan’s TDF analyzer.
