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Advisors Need to Quantify their Value

Anderson School of Management, UCLAAt a sold out TRAU C(k)P session on campus at UCLA Anderson School of Management, the question among experienced advisors is how to show value to clients to stave off the trend of diminishing fees. It’s difficult for most plan sponsors to understand who is a good plan advisor and what a fair price for the services being rendered is.

One advisor in class said that they have started creating a list of various services they provide, the number of hours they expect to expend and the prices charged. It gives clients a good understanding of what they are getting for the money paid and it stops the annoying trend of a less experienced or even unqualified plan advisor from coming in and saying they will charge far less. The plan sponsor can show the list of services they get from their current advisor and ask for a comparable bid. Better yet, plan sponsors should ask the other advisor to show how they will perform the comparable services with a list of people and capabilities we well as other clients receiving those same services.

Not only will most inexperienced advisor be unable to match the services being provided by an experienced incumbent, it will highlight the value currently being received. Not coincidentally, that advisor in class at UCLA was the only one not only able to maintain their price point but is actually increasing pricing.
One of the issues is that many plan advisors are paid through revenue sharing – employers rarely write a check – further confusing the issue. The services provide, capabilities of the advisor and the fees charged become very transparent through an RFP process. Experienced advisors should get behind this trend not just for prospects but also for clients. The clients lost will be those that do not appreciate the quality of services being received replaced by far more plan sponsors who realize you get what you pay for.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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