how-to-differentiate-your-advisory-practice

What Plan Sponsors Want Now: 4 Ways to Differentiate Your Advisory Practice

Increased competition, firm compression, similar value propositions, and margin reduction all point to one thing: retirement plan advisors need to find ways to differentiate themselves if growth is their goal. The advisors who are succeeding in today’s market make themselves indispensable to sponsors due to the quality of ideas they share, the resulting cost savings, and the genuine care they show for sponsors’ best interests.  

While competition among advisors is fierce, the right approach can help you thrive in today’s landscape. To help you push beyond the status quo and into growth territory, we’ve identified four ways for you to deliver what plan sponsors are looking for and differentiate your practice. 

1. Let sponsors know you understand their needs

Plan sponsors are looking for advisors who see the full picture of their experience—who understand the problems they are facing and offer proactive solutions instead of pushing a canned approach or product. According to Vestwell’s survey of plan sponsor wants, “advisors need to engage their clients in conversations based on needs rather than selling plans based on perception1”.

The work to demonstrate this understanding, however, requires more than thoughtful questions and a listening ear and it begins well before walking into a meeting with a sponsor. Advisors who analyze opportunities to de-risk a sponsor’s plan prior to discussion—with either prospects or clients—are able to differentiate themselves from competitors. These advisors are demonstrating the great care they have taken to share new opportunities and money-saving strategies. 

2. Be prepared to offer comprehensive, cost-saving solutions 

For most plan sponsors, the biggest challenge they face is managing the cost of maintaining their organization’s retirement plan(s). So, of course they look to advisors who can help to reduce these costs. The best advisors, however, go beyond cost consciousness to deliver meaningful guidance. According to a survey by MassMutual, “Plan sponsors look for advisors who emphasize reduced cost, advise on plan design and investment selection, and help with other benefits and fiduciary support.” 

The ability to position oneself as a well-rounded advisor is invaluable. In addition to offering necessary cost-savings advice, many advisors are building out their repertoires to include advising on additional benefits. The ability to advise on DB plans, which present a wide range of value and opportunities for sponsors looking to de-risk, can open new avenues for business growth and offer qualified advisors a lucrative competitive edge. 

3. Offer DB plan sponsors expertise on controlling risk and navigating volatility  

According to a study by Institutional Investor, when it comes to DB plans, “top priority for sponsors is controlling risk and volatility2.” Sponsors look to advisors to alleviate their pain in volatile times; offering guidance on ways to limit DB plan risk, volatility, and cost helps to relieve sponsors’ stress while strengthening those client relationships. Advisors interested in establishing a DB practice or growing their current DB practice are using the support of our experts at O3 Edge to gain a competitive advantage and bring new ideas to plan sponsors. 

4. Show that you are genuinely committed to sponsor and plan success 

For plan sponsors, the right advisor will demonstrate a commitment to their success not only on the fiscal side of things, but on a human level as well. The ability to connect to a sponsor’s dreams and aspirations, to understand what they are trying to achieve, and to provide actionable solutions to help them meet their goals is precisely what sponsors are looking for in an advisor. 

As an advisor, exhibiting a desire to “protect client’s money,” is a given. But bringing new ideas to a sponsor’s table and being able to show exactly how your vision and approach will benefit your client, will create lasting relationships with clients. 

Understanding the full picture of a sponsor’s plan makes it possible for advisors to connect on a meaningful level. By providing solutions that bring sponsors’ goals to life and showing genuine care for guiding plans toward optimal operations, plan advisors are able to differentiate and establish themselves as trusted partners. 

O3 Edge is one tool that advisors are using to set themselves apart. An intuitive prospecting solution,  O3 Edge allows retirement plan advisors to gather detailed information on any plan, uncover areas of opportunity, and utilize dynamic tools and resources to gain a competitive advantage. Learn more about how O3 Edge can help you grow your practice. 

1 https://news.vestwell.com/2018-retirement-trends-report/#.XoO829NKhTZ

2 https://www.institutionalinvestor.com/article/b14z9mr2001r82/guide-to-defined-contribution-defined-benefit-services-refining-strategies-to-improve-results-for-plan-sponsors-and-participants