PLANADVISER - September/October 2017 - 20

trendspotting
Enough
With
Falling
Fees
Elite advisers are
better-defining
their value
RON COHEN, head of defined contribution
investment only (DCIO) sales
for Wells Fargo, recently sat down
to talk shop with the PLANADVISER
editorial staff.
The conversation initially focused
on the surprisingly wide gap that a
new Wells Fargo survey identified
between what defined contribution
(DC) plan sponsors say they expect
from their advisers versus what
advisers generally prioritize as offerings.
In short, the research found that
many DC plan advisers misunderstand
their clients' top concerns and
expectations, potentially leading to
friction when it comes time to assess
fees and renew the relationship.
But Cohen also pointed to an elite
subset of advisory firms that not only
find ways to better serve their DC plan
clients' particular demands-they get
paid well to do it, too.
TALKING POINT
401(k) Contributions on the Rise
Nearly one-quarter, 23%, of working
Americans have increased their retirement
savings rate so far this year. This is the
highest reading in six years of polling.
Source: Bankrate.com
20 | planadviser.com september-october 2017 Art by Claire Merchlinsky
" At first,
it was the recordkeepers
that were being
squeezed on fees and told
that their services have been
commoditized, " Cohen observed.
" More recently, we have seen this challenge
move more into the adviser's
domain. But just in the last couple
months and years we have seen
another trend emerge-of advisers
standing up and saying, 'No more. This
is my fee, and we deliver tremendous
value for that fee.' "
In fact, Cohen noted that " more
than a few " firms with a wide footprint
in the defined contribution advisory
space are actually increasing their
fees-in some cases quite substantially.
What is more, clients are willing to pay
the higher fees in many cases because
they have come to understand exactly
what they are paying for and why. A
big part of this success, and it sounds
simple, is that the advisory firms are
finally finding ways to clearly demonstrate
in regular reporting everything
they do for their plan clients, including
all the behind-the-scenes man hours,
analyses and general service activities
the plan sponsor might not actually be
aware of.
" Why is this working? Because
these firms are serving the real
needs of their clients, and even more
importantly they are proving and
demonstrating their value, " Cohen
said. " These firms have simply said,
'no more' to falling fees. They are no
longer trying to just underbid to win
and protect business. They know what
they do is right by their client and that
the deliverable fully justifies the fee. "
Cohen suggested plan sponsors will
generally respond positively to advisers
who are proud of their service offering
and willing to frame it as a premiumlevel
service. -John Manganaro
http://www.Bankrate.com http://www.planadviser.com
PLANADVISER - September/October 2017

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