What are plan sponsors looking for in a financial advisor?

What are plan sponsors looking for in a financial advisor?


In one of the greatest superhero movies of all time, the Joker tells a group of wealthy businessmen, “If you’re good at something, never do it for free.” And while this guidance may come from a raging supervillain, it’s actually pretty sound advice.

As a financial advisor, you’re in the unique position to provide plan sponsors and participants with advice and guidance on monetary issues—which eight out of ten American adults report they could benefit from [1]. You’ve been able to turn your financial savviness into a career, and it’s important to continue bringing in new clients and growing your business. But with more than 300,000 financial advisors in the U.S. alone, you have to set yourself apart. And what’s one of the best ways to do that? Know what plan sponsors are looking for in a financial advisor and know how to demonstrate that you have the skills and expertise potential clients are looking for.

What do plan sponsors want from a financial advisor?

A recent survey by the National Association of Plan Advisors and The Plan Sponsor University found that only 53 percent of retirement plan sponsors are happy with their current advisor and just 55 percent are happy with the value they receive from their advisor [2]. These numbers aren’t especially encouraging—but they do open the door to plenty of opportunities.

Experts say it’s vitally important to demonstrate that the value you deliver as a financial advisor is worth the fees and other costs plan sponsors take on when they hire you. So what can you do to prove your value, keep your current clients happier, and attract new customers? Provide plenty of opportunities for participant education, communicate effectively, and deliver better investment results, for starters.

Roughly 25 percent of plan sponsors report switching advisors because of unresponsive tendencies or unhelpfulness with critical services—meaning you’ll have to be engaged at the very least [2]. And in the broadest sense, plan sponsors want to know that you’re going to help improve the retirement outcomes for plan participants.

How to show your value as a financial advisor to plan sponsors

It becomes clear that showing your worth to plan sponsors is paramount if you’re trying to grow your business. Luckily, there are actionable steps you can take to showcase all of the value you have to offer.

  • Understand the needs of the plan sponsor’s firm and determine goals for the new plan.

  • Find the challenges of the plan upfront, and communicate openly and honestly with the plan sponsor if any new issues arise.

  • Minimize the administrative burden the plan sponsor faces in regards to the plan. Offer a 3(38) investment manager service if applicable. If a 3(38) service isn’t available, ensure that the plan sponsor is meeting its fiduciary responsibilities.

  • Offer the latest and best 401(k) technology to keep participants in-the-know about the health of their account.

  • Help participants set retirement goals and provide necessary education to help them reach those goals.

Providing the above experiences to plan sponsors can go a long way in proving your value as a financial advisor—making your fees seem much more “worth it.” And if you’re wondering how overall cost comes into play, you might be surprised. Experts suggest that while plan sponsors are cognizant of plan fees, overall cost of a plan doesn’t seem to be a major concern among most plan sponsors [2]. Sponsors want a high-quality advisor, after all—and we’re sure if the Joker can prove the value of his “services” to a group of successful entrepreneurs, you can too.

And that’s where we come in. Here at PAi, we’re focused on the client experience as well. Our technical and customer service systems work to keep financial advisors productive, allowing advisors to spend more time on the things that really matter—like participant education, efficient communication, and deliverable investment results. We want to help you help your clients secure a spot on the path to retirement readiness and exceed the expectations of plan sponsors all at the same time.

Give us a call today to start the conversation: 800.236.7400.