Your Retirement Plan “Dream Team”

Having a deep bench of expert support can help you add more value, strengthen client relationships, and grow your practice.

As an advisor, your goal is to be your clients’ go-to retirement plan resource, which requires you to wear a lot of hats. However, it isn’t reasonable to expect that you can fulfill all of these roles and be all things to your clients by yourself.

In fact, the most successful retirement plan outcomes are most likely to be achieved through partnership with an all-star “dream team” — composed of the plan sponsor, third party administrator, recordkeeper, asset managers (defined contribution, investment only (DCIO)), wholesalers, and of course, you, the advisor.

Every retirement plan advisor should have a variety of support resources and expertise to tap into so they can offer value-added services to their plan sponsor clients, whether those professionals are by your side or behind the scenes. Here is how partnering with other service providers can help you leverage best practices from across the industry to instill confidence with your clients and improve retirement outcomes for their participants:

Asset Management and Investments

Although the services you offer as an advisor are technically different from recordkeeping and asset management, your plan sponsor clients may view you as part of a package deal: advisor services, plan administration and investments. If you don’t have the right players on your “dream team,” your competition can potentially unseat you on one, two or all three counts.

Having access to knowledgeable professionals who can provide support when it comes to selecting and managing your clients’ investments for the plan puts you a cut above the rest because you can offer a complete package that serves the needs of the plan and its participants.

Partnering with a DCIO, for instance, enables you to leverage universes of investments and fund managers you might not otherwise have access to. You can use the DCIO’s expertise and insights to develop investment menus that offer passive strategies and collective investment trusts (CITs), for example — both of which are gaining favor among retirement plan sponsors because they are both efficient and affordable. In fact, 41.6% of plan sponsors said they intended to switch to more institutional vehicles such as CITs or separate accounts in 2020, according to Callan Institute’s 2020 Defined Contribution Trends Survey.^[1]

A DCIO can also help you provide ongoing investment reviews and benchmarking to ensure the plan’s investments are performing in line with similar plans in the marketplace, as well as minimize the plan sponsors’ fiduciary liability by ensuring that the investment selection is both prudent and fulfilling their fiduciary obligations.

Wholesaler partnerships are also key to expanding the universe of investment options you’re able to offer for your plan sponsor clients — they can provide access to high-quality, thoughtfully engineered products. And especially now, when markets are rife with volatility, a wholesaler partnership serves an added benefit: as you seek ways to get participants’ retirement portfolios back on track after market turmoil, you can leverage wholesalers with access to sophisticated retirement planning software to help identify retirement savings shortfalls and recommend strategies to close those gaps. They can also enhance your expertise pool by coming in to talk to clients, and/or bringing in experts who can help put some context to market events, potentially offering some perspective and peace of mind.

Wholesalers may also be able to assist with determining retirement withdrawal rates and portfolio return estimates. You can look to wholesalers at firms that develop and market retirement income products; while complex, these are worth a closer look as they can be an effective way to integrate lifetime income solutions into a retirement plan. In addition, wholesalers can be invaluable when it comes to educating your plan sponsor clients about the myriad of options available, as they can offer information and training support in the form of seminars and events (albeit virtual these days!) and provide education materials on a variety of retirement issues and strategies.

In addition, a recordkeeper can assist you in adding value for your plan sponsor clients by providing investment-neutral administration and recordkeeping to help deliver plan investments that are appropriate for their plan and participants.

Plan Administration and Data

When it comes to managing plan and participant data, the recordkeeper is really the star of the team. Forging partnerships with recordkeepers provides you an opportunity to shine and add real value for your plan sponsor clients by keeping tabs on plan performance and participant data and providing that information in a timely manner, seemingly effortlessly, when requested.

Recordkeepers can support you from a plan design and implementation standpoint, too, providing scenarios based on the plan sponsor’s census information. They can also deliver expertise on various plan types, including traditional and safe harbor plans, along with Roth 401(k)s, age-weighted and new comparability profit sharing plans tailored to meet plan sponsors’ needs.

You can also work with your recordkeeper partners to set up notifications for key events or milestones, such as contribution rates, plan termination dates, asset thresholds, variance to known risk tolerances, eligibility for catch up contributions, bonus payrolls, required distributions and the like. Having access to data is critical when it comes to enhancing your ability to help your plan sponsor clients achieve a key goal — that all employees are retirement-ready. To help them fulfill this goal, you need individual employee data — that’s where the recordkeeper comes in.

Regulatory Guidance and Plan Compliance

Working with a good third party administrator (TPA) ensures that you can remain in the loop on ever-changing retirement plan rules and regulations, and helps increase your confidence when having conversations about compliance concerns, as that is their world. Having a solid TPA partner helps you become more ingrained in day-to-day plan operations and enables you to provide valuable insight to your clients on their plan.

Having input from a TPA, along with the recordkeeper, also provides you an opportunity to offer customized plans uniquely designed to meet plan sponsors’ needs while optimizing tax strategies and retirement readiness.

In addition, a TPA can do the heavy lifting when it comes to compliance testing, contribution calculations, and preparing documents such as the annual Form 5500. They can also serve as a resource for technical plan needs, allowing you to focus on your strengths when serving your retirement plan clients.

TPA’s are also plugged into the regulatory arena and can offer additional intelligence and color on new rules and legislation to help you stay abreast of changes on Capitol Hill so you can communicate them timely to your clients.

Business Development

Several members of your retirement plan “dream team” can help you make inroads when it comes to prospecting and bringing new clients into your business.

Strong TPA and recordkeeper partners can tap their existing network to funnel business your way. Although nearly 25% of plan sponsors indicated they plan to conduct a recordkeeper search this year^[2], in general, employers are more likely to show their dissatisfaction with plan performance by switching advisors rather than other service providers. Being embedded with a recordkeeper and/or a TPA helps you create more “stickiness” with your plan sponsor clients, as you’re able to offer a complete package of services and leverage your partners’ expertise and capabilities to fulfill your clients’ needs.

Similarly, having a DCIO by your side at a finalist presentation, for example, can help you demonstrate your expertise and authority when it comes to your ability to access and leverage a broad universe of investments, fund managers and strategies to meet participants’ needs.

A deep bench of expert retirement plan professionals supporting you enables you to demonstrate your industry connections, show expertise and confirms to your clients that you can manage their retirement plan as it grows. This decreases the chances that a client will outgrow you as the plan grows, allowing you to boost retention and increase assets under management.

Having a retirement plan “dream team” to support you provides you an opportunity to become an indispensable part of your clients’ plan management and operations. Most importantly, it enables you to deepen your existing relationships by delivering exceptional service and value to your plan sponsor clients and their participants.

[1] Callan Institute. 2020 Defined Contribution Trends Survey. January 2020.

[2] Callan Institute. 2020 Defined Contribution Trends Survey. January 2020.