There are two distinct ways that a Plan Sponsor normally views their relationship with their retirement plan Advisor – either as a trusted-partner or as a vendor. The strongest and most favorable outcomes occur when the correct financial advisor is viewed as a partner to the plan sponsor.
Plan Sponsors look for advisors who are knowledgeable, good listeners, attentive, efficient and good problem-solvers. To comprehend the type of relationship that exists between a plan sponsor and an advisor one need only observe the interaction among the committee members of a retirement plan committee meeting. If every plan committee member does not share a collective feeling that their Advisor is leading the committee through good decision-making on Investments, Fiduciary Issues, Plan Design and Employee Education, then the relationship is not as strong as it should be.
Original Research Findings
In original research conducted by MassMutual Financial Group, titled “Winning Combination – What retirement plan sponsors value most from financial advisors” it was identified that plan sponsors prefer to work with plan advisors who emphasize employee education, good customer service and reducing plan costs as core to their value proposition. The research also reflects that “among those already working with an advisor, fiduciary support trumps cost.”
The report highlights the many advantages of working with a strong advisor. Among the findings are:
- Sponsors who work with an advisor find them highly valuable;
- Companies that work with an advisor are more engaged and are more likely to think their employees are saving enough for retirement;
- Plan sponsors working with an advisor review their plan more often; and
- A third of those not working with an advisor are likely to do so in the future, and most are open to the possibility at plan review time.
The relationship among plan sponsor, plan participants and a financial advisor can co-exist in a number of different forms. Seasoned retirement plan advisors are astute in recognizing the many differences between a good trusted-advisor professional working-relationship versus a client-vendor relationship.
