What traits in their plan’s advisor do plan sponsors value? Which ones should they value?

BY: David I Gensler, MSPA, MAAA, EA 

Which Qualities Plan Sponsors Do Value

A recent poll of plan sponsors wanted to know which services plan sponsors most value from their advisors. Asked to name their top three, two stood out:

Monitoring investments (81%)

Acting as a co-fiduciary (81%)

Coming in a distant third (at 48%) was to provide benchmarking. Other advisory services that made the list were:

  • Educating about fiduciary responsibilities (27%)
  • Proposing new investment options (24%)
  • Employee education (15%)
  • Offering comparable lineups (12%)
  • Offering fiduciary training 93%)

 

Which Qualities Plan Sponsors Should Value

When the plan sponsors were asked which services they should value, the results changed a bit. Acting as a co-fiduciary led the way, with 79%, while monitoring investments slipped to number 2 at 60%. Providing benchmarking and education about fiduciary responsibilities tied for third at 57%.

Advisor Qualities

When plan sponsors were asked about which advisor qualities they valued most, 61% went for responsiveness. Coming in at a close second was honesty and integrity (52%) and bringing up the rear was a close partnership (33%).

However, when asked which plan advisor qualities they should value, the results again got reshuffled a bit. Honesty and integrity led the way at 67%. Interestingly enough, coming in a strong second at 60% was acting as a co-fiduciary. Third under the “should value” category was “retirement plan knowledge.”

When the survey was opened up to plan sponsors and plan participants, the results started to change. Asked which three qualities should differentiate advisors, the top results were:

  • Is transparent with fees (53%)
  • Stays engaged with the plan (47%)
  • Is proactive with recommendations (44%)
  • Is responsive, efficient and thorough (40%)

 

So when participants entered the survey mix, honesty and integrity were nowhere to be found. Certainly, the qualities of honesty and integrity are extremely important. In my opinion, plan participants assumed that those qualities were a given (who would deal with someone they thought was not honest?).

To me, what comes through loudly and clearly is that participants are hungry for help. This is borne out by numbers two, three and four. Staying engaged with the plan, being proactive with recommendations and being responsive, efficient and thorough all are different sides of the same coin. They may not say it overtly, but participants want all the help they can get.

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