WESTWOOD, Mass., December 13, 2005 – NYLIM Retirement Plan Services, a division of New York Life Investment Management LLC (NYLIM), has found that most of its defined benefit clients who moved from an unbundled to a bundled platform during the last several years have seen overall pension service, costs and employee awareness improve since their plan converted.
Bundled pension services entail using one provider, such as NYLIM Retirement Plan Services, for most or all of the services necessary to maintain the plan. Such services include administration, investment management, trust, actuarial consulting and employee communications. Under a traditional, or unbundled, model, a plan sponsor arranges and pays for each of these services a la carte, usually from different firms.
For example, according to NYLIM Retirement Plan Services, 84 percent of its pension clients who switched to a bundled environment indicated in a recent study that overall service to their plan had improved. Similarly, 75 percent of these clients questioned said plan administration had improved while 17 percent thought it had stayed the same. Plan administration includes such services as answering participant telephone inquiries, processing payroll feeds and distributing checks to plan beneficiaries.
Sixty-seven percent of plan sponsors in the study said the effectiveness of their service team had been enhanced under a bundled model, while 33 percent reported it had not changed.
Additionally, 73 percent of plan sponsors questioned indicated that investment services, such as investment review and monitoring, the range of available investments, and investment fiduciary support, had improved over their prior provider, while 27 percent said investment services had stayed the same. None reported a decline in service.
Many of NYLIM Retirement Plan Services’ plan sponsor clients also saw a decline in servicing costs associated with their pension plan under a bundled platform. Sixty-seven percent of NYLIM Retirement Plan Services’ defined benefit clients in the study said their pension costs declined versus 25 percent who said the cost had stayed the same and eight percent who said costs had risen.
“Until now, there’s been anecdotal evidence that bundling improves service to pension plan sponsors by enhancing automation, efficiency and plan oversight, but now we have data to back that up,” said Don Salama, managing director of sales, marketing, and product development for NYLIM Retirement Plan Services. “Bringing state-of-the-art, web-based technology to the traditional world of pension plans is clearly revolutionizing this business during a time when plan sponsors want fewer service providers, not more.”
Finally, NYLIM Retirement Plan Services has seen an apparent increase in its clients’ employee awareness of their pension benefits in the switch to bundling. Seventy-five percent of plan sponsors questioned believe employees’ awareness of their pension benefits had improved as opposed to 25 percent who thought it had stayed the same. Employee awareness of a pension plan is important to plan sponsors, who offer this relatively high-cost benefit for reasons that include employee attraction and retention.
The study was performed by Rich Schroder of Anova Consulting Group in Brookline, Massachusetts. Respondents to the study represent more than 90 percent of NYLIM Retirement Plan Services’ pension clients who moved from an unbundled service arrangement to NYLIM’s bundled platform from January 2002 to August 2004. Anova is a market research and consulting firm focused on the financial services industry.
“Although our sample size is small due to the fact that this trend is still emerging, the results of the survey show a lot of potential for growth in the bundled pension market,” said Salama.
About NYLIM Retirement Plan Services
NYLIM Retirement Plan Services provided services to more than 2,100 defined contribution, defined benefit and deferred compensation plans as of October 31, 2005. With offices in Westwood, Massachusetts, and Parsippany, New Jersey, NYLIM Retirement Plan Services administers retirement programs for small, medium and large companies, multi-employer plans, and individuals throughout the United States, and is widely recognized for its leadership in bundled defined contribution and bundled defined benefit plans.
With more than $196 billion in assets under management as of October 31, 2005, New York Life Investment Management LLC and its affiliates provide investment management and related services to a wide range of individual, corporate, public, and Taft-Hartley clients. NYLIM offers institutional asset management, retail investments, retirement plan services, guaranteed products, real estate investments, and alternative investments. For more information, visit NYLIM’s website at www.nylim.com.
October 18, 2011 (PLANSPONSOR.com) – According to a recent survey by Anova Consulting Group, small market retirement plan sponsors in the adviser-sold marketplace report that DC providers (or recordkeepers) are delivering a higher level of client service than retirement plan advisers.
Findings from the research show that on an overall basis, plan sponsors with less than $5MM in plan assets are generally highly satisfied with their service contacts at the provider / recordkeeper, but only somewhat satisfied with their dedicated retirement plan advisers. Of over 1,000 plan sponsor survey respondents in the adviser-sold space, 88% state that they are “very satisfied” with their provider’s service contact / relationship manager compared to only 77% who are “very satisfied” with their retirement plan adviser.
“As the DC industry has matured and consolidated, successful providers have increased their focus on plan sponsor service in order to boost client retention” said Richard Schroder, President of Anova Consulting Group, in a press release. “Results from the plan sponsor research we’ve performed over the past decade show a consistent upward trend in satisfaction scores for providers’ client service levels and personnel.”
The same research also reveals that retirement plan advisers have not kept pace with these rising service levels, particularly among smaller plan sponsors, the press release said. Differentials in service ratings are most pronounced for sponsors of plans under $5MM in assets, who tend to be more dependent on their advisers for plan administration assistance. Areas of particular concern include frequency of client contact and taking a proactive (vs. reactive) approach to the relationship (83% of plan sponsors are very satisfied with the level and method of contact with their providers vs. 74% for financial advisers). For larger plans between $5-$25MM in assets, advisers are more attentive to plan sponsors, with the gap between recordkeeper and adviser service levels narrowing considerably and even reversing in some cases.
“In an increasingly competitive marketplace, customer satisfaction will continue to be a key differentiator among advisers in building and maintaining successful practices,” suggests Schroder. “This study reinforces the necessity for retirement plan advisers to place further emphasis on the quality of their relationships with clients. Similar to what has occurred at the provider level, it will become ever more important for advisers to demonstrate a high level of service to their clients in order to differentiate themselves from their competition and build loyalty, especially as fees and the overall value provided by financial advisers continue to come under increased scrutiny.”
For Immediate Release
Contact: Andrew Cloutier
Anova Consulting Group, LLC
(617) 731-1045
andrew@anovaconsulting.com
BROOKLINE, MASS., October 18, 2011 – According to a recent survey by Anova Consulting Group, a leading provider of customized market research, sales training and consulting services to financial services and human capital management companies, small market retirement plan sponsors in the advisor-sold marketplace report that DC providers (or recordkeepers) are delivering a higher level of client service than their retirement plan advisors.
Findings from the research show that on an overall basis, plan sponsors with less than $5MM in plan assets are generally highly satisfied with their service contacts at the provider / recordkeeper, but only somewhat satisfied with their dedicated retirement plan advisors. Of over 1,000 plan sponsor survey respondents in the advisor-sold space, 88% state that they are “very satisfied” with their provider’s service contact / relationship manager compared to only 77% who are “very satisfied” with their retirement plan advisor.
“As the DC industry has matured and consolidated, successful providers have increased their focus on plan sponsor service in order to boost client retention” said Richard Schroder, president of Anova Consulting Group. “Results from the plan sponsor research we’ve performed over the past decade show a consistent upward trend in satisfaction scores for providers’ client service levels and personnel.”
That said, the same research also reveals that retirement plan advisors have not kept pace with these rising service levels, particularly among smaller plan sponsors. Differentials in service ratings are most pronounced for sponsors of plans under $5MM in assets, who tend to be more dependent on their advisors for plan administration assistance. Areas of particular concern include frequency of client contact and taking a proactive (vs. reactive) approach to the relationship (83% of plan sponsors are very satisfied with the level and method of contact with their providers vs. 74% for financial advisors). For larger plans between $5-$25MM in assets, advisors are more attentive to plan sponsors, with the gap between recordkeeper and advisor service levels narrowing considerably and even reversing in some cases.
“In an increasingly competitive marketplace, customer satisfaction will continue to be a key differentiator among advisors in building and maintaining successful practices,” suggests Schroder. “This study reinforces the necessity for retirement plan advisors to place further emphasis on the quality of their relationships with clients. Similar to what has occurred at the provider level, it will become ever more important for advisors to demonstrate a high level of service to their clients in order to differentiate themselves from their competition and build loyalty, especially as fees and the overall value provided by financial advisors continue to come under increased scrutiny.”
Established in 2005, Anova Consulting Group is a leading market research and consulting firm focused on Win / Loss analysis and client satisfaction analysis. By helping its clients understand why they win, lose and retain business, Anova provides strategic perspectives to its clients, driving better decision-making, product development, sales effectiveness, client service, and continuous improvement. Last year, Richard Schroder, president of Anova, released a book about Win Loss Analysis titled, From a Good Sales Call to a Great Sales Call (McGraw-Hill, 2011), which details how learning from post-sale Win / Loss debriefing helps close more sales.
For Immediate Release
Contact: Heather Jenkins
Anova Consulting Group, LLC
(617) 731-1085
heather@anovaconsulting.com
BROOKLINE, MASS. – According to a new survey by Anova Consulting Group, a leading provider of customized market research, sales training and consulting services to financial services and human capital management companies, retirement plan sponsors report that client service has now become the #1 or #2 reason for choosing a new plan provider over a rival firm.
The 2010 Anova survey of more than 300 plan sponsors in the middle and large markets (plans with over $25 million in assets under administration) reveals the significance placed on client service and fit with an account team has increased for plan executives. In an earlier survey in 2008 and 2009, client service ranked #3 or #4 in importance, after fund selection and fees.
Notably, 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 percent more likely to refer to client service as a factor in their initial search criteria, 33 percent 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 Rich Schroder, president of Anova Consulting Group. “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.”
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, according to Anova. Another reason, according to Schroder 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.”
Schroder, whose firm has been performing market research for leading financial services and human capital management firms since 2005, is the author of a new book, From a Good Sales Call to a Great Sales Call (McGraw-Hill, October, 2010), which details how learning from post-sale debriefing helps close more sales.
Established in 2005, Anova Consulting Group is a leading market research and consulting firm focused on Win / Loss analysis and client satisfaction Analysis. By helping its clients understand why they win, lose and retain business, Anova provides strategic perspectives to its clients, driving better decision-making, product development, sales effectiveness, client service, and continuous improvement. Last year, Richard Schroder, president of Anova, released a book about Win Loss Analysis titled, From a Good Sales Call to a Great Sales Call (McGraw-Hill, 2011), which details how learning from post-sale Win / Loss debriefing helps close more sales.
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