Providers Need Value Proposition to Win Business

April 24, 2013 ( – A survey of retirement plan advisers (called “consultants” in the study) revealed two important criteria for providers to be included in a plan sponsor’s search.

Consultants said the recordkeepers included in their searches demonstrated experience in the specific market segment and industry of the plan sponsor and demonstrated expertise in solving that sponsor’s unique problems and issues, according to the “2012 Perspectives Study: Retirement Plan Consultants” by Oculus Partners. Another important factor was having a clearly articulated value proposition that is described in a way relevant to the sponsor’s situation. In general, providers were described as struggling with articulating their unique differentiators and value proposition.  

Capabilities that could make a provider stand out, as cited by survey respondents, included: 

  • The ability to offer integrated defined contribution (DC) and non-qualified deferred compensation (NQDC) services is critical in the large plan market, with DC and defined benefit (DB) integration a critical factor in at least one-third of the searches; 
  • Providers should understand the changing world of Employee Retirement Income Security Act (ERISA) fiduciaries; and 
  • Providers should demonstrate capabilities that are required by a specific industry or industries. 

According to the study, plan sponsors feel it is the provider’s role to periodically review and evaluate plan fees, and offer sponsors the best fee they can. The most preferred fee structures were fee-for-service or per participant fees.  

Eighty-five percent of the consultants responded that poor request for proposals (RFP) responses have a negative impact on the provider’s chances of success, either eliminating the provider from consideration or hurting the provider by creating a negative perception that they then have to overcome. According to the consultants, too often the providers simply read the company’s website and assume that this is sufficient for “knowing the client.”    

Consultants and sponsors prefer for the final presentation to be led by the relationship manager (RM) they would be working with at the provider, not the sales person, so that the “chemistry” between the RM and the sponsor can be established.  

The study is available for purchase. More information is at