The past few months have been jarring, at best. Yet for retirement plan advisors, times of uncertainty emphasize the importance of helping plan sponsors with the administrative and fiduciary responsibilities of their company sponsored retirement plans. We asked retirement experts Katrina Bell, CIMA (ZUNA), Tony Fiore (PGIM Investments) and Chris Miller (Pensionmark) how best to respond. They highlighted three key ways advisors can showcase their value amidst these challenging times.
In times of market volatility, people can become particularly sensitive about the status of their finances. Participants are logging in more, evaluating the investments in their portfolios, and asking questions. Plan sponsors are not only expected to answer these questions, but they also have a fiduciary obligation to give a good one. Tony Fiore points out that this is where having an advisor as a 3(38) or 3(21) can help sponsors feel more secure knowing their investment selections were properly vetted by a professional. Fiore adds that this is a great way to approach a prospective client and say “You have a lot to deal with and a lot to think about…and you have to deal with those participants. You have a fiduciary responsibility. That’s not going to be number one on your list, but it’s going to be number one on your employee’s list.” If you’re approaching a new client, ask them about their investment charter and their investment policy statement. Chances are if they don’t have one, having a retirement advisor step in can make a lot of sense.
Just as you add value to your clients, other vendors should be adding value as well. Now is the perfect time to take a second look at those supporting your client’s plans and ask how they can do better. Miller had some thoughts, saying, “If you can offload anything for your plans sponsor that you can’t get at with your current solution, look for solutions that do. Because if you’re not, someone else is going to call your client and say “I can do this for you.’” By way of example, Miller shares that several clients are laying off important staff such as HR employees who typically manage payroll. The manual entry process of payroll can take hours each month and choosing a 401(k) that integrates with your payroll provider can offer substantial administrative relief. It’s also worth exploring other value-add services such as purchase payback providers. At a time when many employers are cutting back on matching, this is a great way to direct additional funds to participants’ plans just by purchasing everyday items.
When markets become volatile and sweeping regulation throws traditional rules about plan distributions and loans out the window, sponsors and participants want answers around what they can and should do. Show clients how your expertise in understanding financial markets, investment strategy, and new regulation is of particular value in times of market volatility. You can approach clients with heightened sensitivity to their problems by showing them ways to save money on their plans, alternatives to plan terminations, and what the new provisions mean for them. Katrina Bell noted this was the first thing her team at ZUNA did when the CARES Act rolled out saying, “We were really able to get in there, reviewing contracts for clients, reviewing plans documents, and then consulting with them on how to implement all these provisions and the CARES Act, if they’re appropriate for their business.”
Given the financial and emotional strains of the time, additional administrative work and fiduciary obligations are the last thing any HR department wants to worry about, especially in the SMB space. While these three tips are ways retirement advisors add value throughout the entire year, they become increasingly important during uncertain times. As an advisor, you can offer immense support by simply giving clients a call to remind them of the stability you offer amid a time of instability.