Most Retirement Plan Sponsors Would Recommend Their Advisor

October 17th, 2016, No Comments, be the first ».

A study from Massachusetts Mutual Life Insurance Co. has good news for financial advisors who want to build their retirement plan practices: Nearly nine in 10 employers that sponsor a retirement plan would recommend their financial advisor to another employer.

“Overwhelmingly, retirement plan sponsors are pleased with the support they receive from their financial advisor and are more than willing to tell other employers,” said Tom Foster, national spokesperson and practice management leader for MassMutual’s retirement plan services. “It’s a great opportunity for advisors who want to build their retirement practices.”

The MassMutual Retirement Plan Referrals Study finds that 88 percent of plan sponsors would recommend their advisor, with 37 percent “very likely” to do so.  Only 10 percent said they were unlikely to make a recommendation, according to the study.

What sponsors want

Nearly six in 10 (58 percent) sponsors find advisors through referrals, either by asking for a referral or receiving one unsolicited, the study shows. Although only 10 percent of sponsors search for advisors online, those who do provide insights into what employers want the most from an advisor.

The top criteria for online advisor searches were:

  • 72 percent wanted an advisor who works with companies similar to theirs.
  • 47 percent looked for customer testimonials.
  • 43 percent gravitated to an effective website.
  • 41 percent focused on a good value proposition.
  • 40 percent appreciated fees being clearly stated on the advisor’s website.
  • 29 percent wanted someone who is local in their area.

Overall, satisfaction with advisors runs high. Nine in 10 sponsors assess the cost and benefits of working with an advisor as valuable (93 percent) and are satisfied overall with their advisor (94 percent), according to the study.  The bigger the retirement plan in terms of assets, the more likely the sponsor is to give the advisor high marks.

Switching advisors

However, the good vibrations can quickly turn bumpy as the study finds that 35 percent of sponsors have switched advisors in the past. Among sponsors who changed advisors, 41 percent did so because they judged their advisor as failing to provide adequate support. Complaints about advisors included a lack of involvement or interest in the plan, not being knowledgeable, being difficult or being unresponsive, according to the study.

Other reasons for switching advisors were costs and fees (17 percent), a change in the company’s management or ownership (15 percent), wanting better service (11 percent), a better plan and/or investments (7 percent) and poor performance and returns (6 percent).

Additional opportunities

Not all of the sponsors who responded to the study currently use an advisor. However, 43 percent of such sponsors would be open to working with an advisor during their scheduled plan review and 35 percent said they would be open to doing so at any time, according to the study.

“The retirement plan business is all about solving problems,” Foster said. “Advisors who are attentive and responsive, keep up with the regulatory environment, and work closely with sponsors to help their employees become retirement ready have tremendous opportunities to grow in the retirement plans marketplace.”

The study polled 565 employers that sponsor retirement plans, including 449 that worked with an advisor and 116 that did not, with retirement plan recordkeeping assets ranging from less than $1 million to as much as $75 million. The research was conducted in 2015 by Greenwald & Associates

Ayo Mseka

A Roundup of Media Coverage During the NAIFA P+P Conference

October 4th, 2016, One Comment ».

Whether or not you were able to attend the NAIFA Performance + Purpose conference in Las Vegas last month, you can get a good overview of the program from posts on the Advisor Today Blog and stories in trade publications. Following is a selection of stories on the conference.

NAIFA’s New Survey on the DOL Rule

NAIFA’s Diversity Action Report

The John Newton Russell Memorial Award

NAIFA Leadership Reports

LifeHappens and RealLifeStories

P+P Conference Workshops

Main Stage Speaker Frank Luntz

Main Stage Speaker Don Trone

NAIFA Legislative Forum

The Department of Labor Fiduciary Rule

NAIFA Officer and Board of Trustees Elections