Monday, January 19, 2015
January 19, 2011 (PLANSPONSOR.com) – According to a new survey by Anova Consulting Group, retirement plan sponsors report that client service has now become the number one or number two reason for choosing a new plan provider.
In an earlier survey in 2008 and 2009, client service ranked number three or number four in importance, after fund selection and fees, according to a press release.
Among the reasons for the increased importance of client service are the continued commoditization of funds and technology in the retirement plan marketplace as well as growing fee pressure affecting all providers. Another reason, according to Rich Schroder, president of Anova Consulting Group, is that “many recent plan turnovers have tended to be among plans that are more complex in nature and need a stronger client service team to handle them.”
The survey shows the value placed on client service rose as retirement plan sponsors reached the final stage of their buying process. While plan sponsors were only 12% more likely to refer to client service as a factor in their initial search criteria, 33% were more likely to cite it as a top reason for the final decision.
“These results should be a wake-up call for retirement plan sales teams that are not currently bringing the appropriate service team members to finals presentations,” said Schroder, in the press release. “Plan sponsors want to know how their account will be managed once the sale is made, so for sales teams, it’s critical that relationship managers not only be in the room, but be skilled at presenting in finals situations.”
The 2010 Anova survey included responses from more than 300 plan sponsors in the middle and large markets (plans with over $25 million in assets under administration).