Plan sponsor satisfaction is quantified—Ron Cohen, head of DCIO sales, joins Wayne Badorf, CFP®, CFS®, and Jon Lagerstedt to explain.

Wayne: Well, Jon, I’m excited. This week we start the first of a two-part series talking about The Science of Satisfaction.

Jon: A little too late to help the Rolling Stones, but right on time to help retirement plan advisors add real value to their clients. I’m Jon Lagerstedt.

Wayne: And I’m Wayne Badorf. This is The Essential Practice. Joining us today is the head of DCIO sales, Ron Cohen with Wells Fargo Advantage Funds. Ron, welcome.

Ron: Thanks, guys; thanks for having me. My first podcast, so I’m very excited.

Wayne: Ron, in your role, you’ve really put your arms around this idea of defining satisfaction in the context of science for plan sponsors in the DCIO space specifically. Can you define, if you will, the science of satisfaction?

Ron: Sure, Wayne. The Science of Satisfaction program is the culmination of surveys we’ve done over the past year. We partnered with advisors from around the country and surveyed their clients to reveal insights into what plan sponsors value in the advisors they worked with.

The program then takes those findings and shares the best practices for advisors to adopt. So the best part, though, is that in addition to sharing the findings, the program creates easy-to-use tools for advisors to implement those practices.

Jon: What are some of the issues we’ve spotted in the DC [defined contribution] marketplace that advisors should address?

Ron: Well, Jon, we discovered that the most important quality plan sponsors look for in their advisor is effective communication. More so than being knowledgeable in the retirement space or understanding investments, they’re looking for an advisor who will communicate with them.

Wayne: Right.

Ron: Yes, it’s important to know those topics, but plan sponsors want an advisor who’s very engaged with their plan and stays connected. It’s the number one differentiator we’ve heard over and over again. One caveat I want to make, though, is that we heard a lot from sponsors that they want advisors to communicate to inform, not to impress. Plan sponsors don’t want to be talked down to. Advisors should be explaining things in a digestible way for the sponsor.

Wayne: OK.

Ron: Another piece we identified was that advisors weren’t doing a good job of showing their value. Advisors do some incredible work with their clients, but they don’t do a good job of PR-ing themselves and getting credit for that great work. They are also looking for an advisor that understands their business and is proactive with them.

Wayne: What do you mean by that?

Ron: What we’re seeing is the plan sponsors are looking for advisors to understand their business in terms of from a day-to-day perspective at the organization level. So what is that plan sponsor? What’s that contact that you’re working with? What are they doing on a daily basis, and where does the retirement plan fit in for them—but then also within their employee population and understanding what the needs are for the participants and where the retirement plan fits in for them as well.

Wayne: What have you seen in the data or the research for advisors who don’t take these actions to either be more effective at communication or engage with their plans—or as you said, communicating to inform?

Ron: Yeah, if advisors don’t address these areas, there are 20 other advisors in that area calling their clients telling them that they will.

Wayne: So are any of these issues more important than others, or are they all important?

Ron: They’re all important, but there are certainly ones that weigh more heavily with the plan sponsors. For example PR-ing yourselves. One of the tools that we developed was an annual summary that our advisors can put together to show the great work that they’ve done for a client over the year.

Wayne: OK.

Ron: Another thing that we’ve put together that we heard from sponsors is give us a calendar of important dates that we need to know about, not only from a fiduciary perspective, but when do we need to be getting together as an investment committee? When are we going to get together to educate our participants? Those types of things that advisors know that they need to do but haven’t been able to do them for a variety of reasons. We’re giving them the tools to easily put those things together and provide them to clients to increase that level of satisfaction.

Jon: So Ron, how would advisors know if this is actually working?

Ron: That’s actually one of the best practices that we identified, and we call it, “know what they expect and show how you deliver.” What we tell advisors is it’s critical for you to survey your clients to find out what is important to them. What are they looking for from the plan both for them at the organizational level and from their employees at the participant level? Because that’s going to be different from client to client.

Wayne: Right.

And it’s going to be crucial for the advisor to customize their services to match those specific needs for that plan sponsor and for those participants.

And then it’s to prove how your service delivers exactly what they’re seeking. Remember what we said—the number one differentiator that plan sponsors say about their advisor is that they are engaged and that they’re connected with their plan and with their organization.

Jon: That’s fascinating, Ron, and we look forward to talking to you next week when we put The Science of Satisfaction into action.

Ron: Guys, thanks again for having me.

Jon: Until next week, I’m Jon Lagerstedt.

Wayne: I’m Wayne Badorf.

Jon: And this is The Essential Practice.


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