PLANADVISER - September/October 2017 - 33

Common errors in plan data to watch for when starting
to work with a new plan include those found in:
* Date of hire data. Was the employee hired for a parttime
or a full-time position? Is he a rehire with prior dates
of service?
* Date of termination data. Did the employee go from
full time to part time, transfer to another division or really
terminate?
* Contract labor information. The
Department of Labor (DOL) keeps
an eye out for employees who are
misclassified as contractors.
* Hours worked. Does the plan
sponsor know how to properly calculate
hours worked for eligibility and
participation?
* Compensation definitions. Is
the plan sponsor submitting the
correct compensation per the definition
in the plan? The plan could use
different definitions of compensation
for different purposes, based on
the demands of nondiscrimination
testing, using one definition to allocate
contributions and forfeitures for
rank-and-file staff and another for
the highly compensated.
Wyatt suggests plan advisers
" Only by
ence that can be applied broadly and uniformly across new
clients; focusing on market segments where services are
most highly valued; exiting segments that are unprofitable;
and updating existing business lines and leveraging the
value of participant relationships for delivery of a broader
set of lifetime retirement planning solutions.
The analysis finds that leading providers who build
and centralize their " client service
evidence " are learning that new
customers are willing to accept some
" feature trade-offs " in order to gain
assessing the real
aims of our clients
can we create
a coordinated
retirement
strategy that best
serves to incent,
attract, reward,
retain and
establish a checklist of information
they need from each client as well
as errors to watch for, and have a
process in place for all staff to use
when coordinating data from plan
sponsors to plan providers. New
clients, and new internal advisory staff, will have to be
carefully trained and instructed on their own responsibilities
as pertain to managing plan data and ensuring prudent
processes are implemented and followed across the board.
Generally, much of the information needed about participants
can be sourced from recordkeepers and from the HR
and payroll functions; however, it may not be handed over
in an immediately useful form.
Automated Onboarding Solutions
Facing the challenges of fee compression, constant regulatory
reform and increased competition, firms across the
retirement services spectrum are stepping back and reassessing
their approach to technology and process management.
According to a white paper published by ProcessUnity,
a provider of third-party risk and process management solutions
for advisers and others scalable enterprises, financial
services firms are " taking a really hard look at service
delivery and asking how they can use their technology
strengths to improve retirement plans and the management
of clients. " The paper is aptly titled " Achieving Service
Delivery Excellence in an Out of Control World. "
ProcessUnity argues, the leading advice-providers are
developing a lower-cost operating model; emphasizing
service simplification and a best-in-class customer experieventually
retire
its work force. "
" benefits of using proven solutions
that are tied to outcomes with predictable
costs and optional upgrades. "
Focus on Service,
Not Investments
Whatever the role processing technology
may or may not have at a
given firm, research from FP Transitions
and SEI Advisor Network
suggests that advisers willing to
carefully manage the client experience
from the very start of a relationship
can generate serious return
for their efforts. According to data
shared by the firms, putting in place
a process that prioritizes client
management
themes over portfolio
management can increase the value
of an advisory business by more than
$1 million over a 10-year period.
The data comes from a study
conducted by the two consultancies-
an effort that looked back over 10 years of data gathered from
more than 8,000 advisory practices. On average, firms that
can be categorized as " client managers " add twice as much in
assets under management (AUM) annually when compared
with firms that fall into the " investment manager " category.
" Despite the similarities found between the two practice
models-with similar numbers of employees, age and
experience of leadership, and a comparable client demographic-the
greatest disparity between the two models'
performance lies in advisers' activities and how they devote
their time, " the research explains. Investment manager
advisers report that they spend more than one-third (37%)
of their time on money management activities such as fund
research/benchmarking and client portfolio management,
while the client-focused group spends less than 3% on these
activities, according to the FP Transitions data. Further,
client managers devote more than half of their time to
client acquisition and client management tasks, compared
with investment managers spending just 30% of their time
on the same activities.
" With 34% of time saved, and not spent on investment
management activities, client managers spend nearly twice
as much time as [do] investment managers on client meetings-37%
and 20%, respectively-and prospecting new
clients, " the research states. -John Manganaro
planadviser.com september-october 2017 | 33
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PLANADVISER - September/October 2017

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