tions before year-end.
Furthermore, plan sponsors expect providers to have
good call centers and web-based functionality, thereby
giving participants an alternative to calling HR, Phillips
says. This can represent a significant saving of the sponsor’s
time. Finally, sponsors look for expertise in plan design—for
a vendor that will have robust discussions with them over
whether to make any changes to the plan, he says. Plan sponsors want guidance about how to handle issues as they arise.
According to Kelly, plan sponsors struggle with how to
improve their plan and increase participants’ appreciation
of it. “Just as the pace of change has escalated, we are seeing
an interest in how to use technology to better meet the
participants’ needs—particularly for retirement readiness,”
One priority for her firm is helping plan sponsor clients
differentiate how each provider approaches the Department
of Labor (DOL) fiduciary rule. Will the provider be issuing
education or advice for investments and distribution decisions? Will it use a third-party for these services? How have
providers and advisers determined, from their business
model, the best way to serve participants? “We are [encour-aging clients to] focus on this when doing an RFP. It could
represent a big change from the incumbent provider, relative to other prospective providers,” she says.
In terms of participant services, the biggest differentiator for a recordkeeper may be whether it has embraced
financial wellness education or whether it factors outside
assets into its retirement readiness equation.
What other resources do service providers offer participants? Budgeting, student loan help, debt help? Does the
provider have aggregation tools to use in retirement readiness calculations? Also, Kelly says, plan sponsors want
to know whether a provider delivers education through a
vehicle that connects with its workers. Does it use gamifica-tion for Millennials? Does it still embrace paper communications for an older work force?
Compass believes the adviser and provider should periodically interact to help keep communications and services
to the client at an optimum. “We survey our provider partners quarterly to ensure we understand their most current
resources and programs, as well as changes to their organizations and/or service models—case in point, changes due
to the fiduciary rule—and work together to determine how
we can best partner to serve our mutual clients,” Kelly says.
In her firm’s service model, advisers typically manage
the recordkeeper relationship. “We prefer to be the ‘
quarterback’ of all things retirement for our clients. And they
typically come to us first. In every case, we see the record-keeper as a partner in the client relationship rather than
as an ancillary service provider or adversary. We’re all
working toward the same goal: better retirement outcomes
for employees,” she says.
Recordkeepers have different approaches for measuring
retirement readiness. Some provide a “plan health or well-
ness” indicator, which estimates the percentage of an indi-
vidual’s pre-retirement income available once he retires
based on his current participation decisions, Kelly notes.
Often of greater interest is whether a recordkeeper can
model the impact of plan design changes on retirement
readiness. This capability often comes with a price tag, but
it can facilitate a conversation between adviser and sponsor
about any needed plan design changes.
“The biggest trend we see is employers asking us to help
modernize their benefits programs,” says Steve Patterson,
executive vice president of workplace investing sales,
Fidelity Investments, in Boston. “There is growing demand
for total benefits solutions [relating to] employee well-being,
[taking a step beyond] financial wellness—in which we’ve
seen great interest, adoption and engagement—to holistic
solutions encompassing a person’s finances as well as his
health, work and life.”
Patterson adds that Fidelity also observes employer
interest in helping employees manage student loan debt,
either through tools or possibly with an employer contribu-
tion program integrated into the company benefits platform.
“Employers see this as a valuable tool for employee retention
and as an advantage in recruiting new talent,” he says.
At the same time, as the market grows more competitive,
employers have increasing expectations for what services
they will receive, Phillips says. “This raises the bar industry-
wide. Most providers do a good job of [supplying] a compre-
hensive package of basic services, but others go above that,
at a cost, all delivered in an efficient fashion.”
He says, if a recordkeeper provides full administra-
tion services, employee education, boots on the ground to
offer employee meetings in multiple locations, robust data
reporting and a determination of how effectively the plan
puts employees on track for retirement, paying the higher
cost to work with that type of provider is worth it.
Kelly points out that, depending on the size of the plan
sponsor, her firm has noticed interest in the degree of
customization a recordkeeper can provide—making written
and web-based communications look and feel as if they come
from the sponsor rather than the recordkeeper. “And they
want to coordinate that with other benefits. They’re interested in having a more holistic benefits approach overall and
whether the recordkeeper can accommodate that objective,”
she concludes. —Rebecca Moore
• It is important to review retirement plan providers,
not just to ensure that their fees are reasonable but
to see if they are serving the unique needs of a plan’s
• RFIs and RFPs can reveal new services that providers
• Advisers should include an open-ended question about
what makes the service provider unique.