BROOKLINE, Mass., May 22, 2013 /PRNewswire/ — Anova Consulting Group, a leading market research firm in the financial services industry, announced today the launch of a new syndicated study entitled “Private Equity in DC Plans: Retirement Industry Perspectives”.
As private equity firms seek ways to tap into the individual investor retirement plan market and plan sponsors weigh various options to increase retirement readiness among their participant bases, Anova proposes to capture the perceptions and concerns of key stakeholders regarding the potential introduction of private equity investment options onto DC platforms.
“Private equity funds and defined contribution plans have not historically shared much common ground, so it will be interesting to see how receptive plan sponsors, advisors, and plan providers are to the concept,” said Richard Schroder, president of Anova Consulting Group. “There are certainly some operational as well as cultural challenges facing private equity firms who wish to sell their investments in retirement plans, but there may also be opportunities, especially given the growth of target date funds and automated plan features. This study will help to flesh out challenges and opportunities and create a roadmap with ideas on how the trend might play out.”
Likely subscribers to the study include private equity firms, retirement plan providers, and retirement plan consultants / advisors. This study will enable subscribers to:
— Assess DC market awareness of / potential demand for private equity
investing
— Identify top areas of concern (and potential solutions) regarding key
operational, technical, regulatory, and fiduciary issues
— Investigate feasibility of various asset class categories and investment
vehicles
Pre-subscribers who enroll by June 14(th) will be invited to offer input into the topics covered and research questionnaire. For the full study prospectus, see www.AnovaConsulting.com.
Private equity players are targeting the 401(k) industry. Will industry insiders welcome them with open arms, turn their noses up, or something in between?
Market research shop Anova Consulting Group is trying to answer that question. They just launched a syndicated study entitled Private Equity in DC Plans: Retirement Industry Perspectives.
The firm intends to “capture the perceptions and concerns of key stakeholders regarding the potential introduction of private equity investment options onto DC platforms,” as private equity firms look for ways to tap into the individual investor retirement plan market and plan sponsors weigh various options to increase retirement readiness among their participant bases.
“Private equity funds and defined contribution plans have not historically shared much common ground, so it will be interesting to see how receptive plan sponsors, advisors, and plan providers are to the concept,” stated Richard Schroder, president of Anova. “There are certainly some operational as well as cultural challenges facing private equity firms who wish to sell their investments in retirement plans, but there may also be opportunities, especially given the growth of target date funds and automated plan features. This study will help to flesh out challenges and opportunities and create a roadmap with ideas on how the trend might play out.”
Likely subscribers to the study include private equity firms, retirement plan providers, and retirement plan consultants / advisors. Pre-subscribers who enroll by June 14th will be invited to offer input into the topics covered and research questionnaire.
For Immediate Release
Contact: Andrew Cloutier
Anova Consulting Group, LLC
(617) 731-1045
andrew@anovaconsulting.com
BROOKLINE, MASS., February 12, 2013 – Win loss survey data from Anova Consulting Group shows that the proportion of plan sponsors remaining with the incumbent after conducting full 401(k) provider searches has continued to grow for the fifth consecutive year. Anova is a leading provider of Win / Loss and client satisfaction analysis in the financial services industry.
For the sales situations Anova researched in 2012, 31% of mid-large market finals with between $20MM and $500MM in plan assets resulted in the plan sponsor remaining with the incumbent recordkeeper, up from 28% in 2011 and 18% five years ago. This figure does not include non-competitive re-bid situations, which are an increasingly commonplace alternative to a full search / RFP process for plan sponsors who are not necessarily dissatisfied with their provider but conduct periodic due diligence reviews for fiduciary reasons. Anova has conducted over 1200 win, loss, and departed client interviews with mid-large 401(k) plan sponsors since 2007.
“Over the last five years, the percentage of plans conducting full-blown searches and electing to remain with their current providers has increased roughly 10% each year. If this trend continues, it will mean that in five more years, 50% of the plans conducting finals searches will remain with the incumbent,” said Richard Schroder, president of Anova Consulting Group. “While it speaks highly of industry-wide client service that so many sponsors are content to stay with their existing providers, this trend should not be discounted by sales and product development organizations.”
As search activity becomes increasingly competitive and 401(k) products and services become more commoditized in the mid-large market, retirement plan providers are striving to differentiate themselves and provide prospects with compelling reasons to leave their incumbents. A comparable product offering with comparable fees (or even a minor fee reduction) are infrequently sufficient to entice a plan sponsor to undergo the effort and uncertainty of a conversion to a new provider.
According to Schroder, “The sales teams that are beating the odds are doing a better job of creating immediate value and differentiating their firms’ offerings during the sales process. With increasingly informed buyers and the ever-growing involvement of sophisticated search consultants and retirement plan advisors, providers must clearly articulate their value propositions and offer a highly consultative sales process customized to a sponsor’s specific needs.”
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. Richard Schroder, president of Anova, is author of the Win Loss Analysis book titled From a Good Sales Call to a Great Sales Call (McGraw-Hill), which details how learning from post-sale debriefing helps close more sales.
For Immediate Release
Contact: Andrew Cloutier
Anova Consulting Group, LLC
(617) 731-1045
andrew@anovaconsulting.com
BROOKLINE, MASS., February 7, 2012 – Analysis of several years of win / loss survey data from Anova Consulting Group, a leading provider of customized market research, sales training and consulting services in the financial services industry, shows that retirement plan sponsors who conduct marketplace reviews with finals presentations are 55% more likely to remain with their current provider today than they were as recently as four years ago.
For the sales situations Anova researched in 2011, 28% of mid-large market searches with between $20MM and $500MM in plan assets resulted in the plan sponsor remaining with the incumbent recordkeeper, compared to 18% in 2007. This figure does not include non-competitive re-bid situations, which are an increasingly commonplace alternative to a full search / RFP process for plan sponsors who are not necessarily dissatisfied with their provider but conduct periodic due diligence reviews for fiduciary reasons. Anova has conducted over 900 win, loss, and departed client interviews with mid-large 401(k) plan sponsors since 2007.
“With the difficult economic environment of the past few years, most companies are more focused on their core businesses than with evaluating their 401(k) plans. Consequently, there’s been a slowdown in RFIs and RFPs, which leads to fewer finals situations, and even then sponsors have been more likely to remain with the incumbent,” commented Chris Cumming, Senior Vice President at Great-West Retirement Services.
According to the plan sponsors, retirement plan advisors, and consultants interviewed, one driving force behind this trend is the increasing commoditization of 401(k) product and service offerings in the mid- large market. “As fee spreads compress and open investment architecture, state-of-the-art technology and customizable participant communications are offered by more competitors, sponsors are increasingly unwilling to undergo the uncertainty and additional effort of a conversion,” said Richard Schroder, president of Anova Consulting Group. “Results from the plan sponsor research we’ve performed over the past decade show a drop-off in provider changes due to core product offering differences — client service issues are now a key catalyst for provider changes.”
“At Putnam, we are seeing sponsors look to improve service delivery, or take advantage of innovation that didn’t exist 3-5 years ago. There is clearly a growing market demand for providers to deliver maximum value to plan sponsors and an enhanced participant experience that leads to higher savings and better retirement preparedness,” stated Edmund F. Murphy III, Managing Director and Head of Defined Contribution at Putnam Investments.
Great-West has observed a similar trend in the mid-large market. “When sponsors conduct a finals process and switch recordkeepers, they are looking to upgrade their overall plan with the latest features and sophisticated investment capabilities while achieving a competitive price point,” added Cumming.
Another driver of the decline in 401(k) provider changes is sales-related. Failure to differentiate is a frequent sales process critique among bids lost prospects who elect to remain with the incumbent. “In an increasingly competitive marketplace with a finite amount of deal flow, sales teams really have to bring their “A” game to win the business,” suggests Schroder. “Before entering a finals presentation, I would urge any sales team to identify 4 or 5 ways in which they are different from the competition and articulate them during the presentation.”
According to Patrick Murphy, Managing Director and Head of Sales at New York Life Retirement Plan Services, “A ‘me too’ approach is not effective in sales finals presentations. Plan providers have to develop products and services with differences that are truly meaningful to plan sponsors. Those providers who can demonstrably add value and have an impact on plan results will be the winners going forward.”
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.
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).
A recent study of defined-contribution sponsor-clients of the industry’s most successful retirement plan advisers points to a straightforward conclusion: Amid this increasingly complex DC landscape, sponsors demand specialized expertise far beyond traditional investment advice.
The survey, conducted by Anova Consulting Group and BlackRock Inc., identified managing fiduciary responsibilities, plan design and understanding participant goals as the most important factors driving sponsors’ satisfaction with their DC plan advisers.
The key lesson: A financial adviser outside the DC arena might think that supporting retirement plans is primarily an investment problem solved by the ability to pick funds. That isn’t the case.
Getting plan participants ready for retirement is increasingly recognized as a savings, behavioral and fiduciary exercise.
That may pose challenges to advisers focused primarily on investment selection. But it also represents a considerable opportunity for those who can develop and deliver comprehensive retirement plan expertise directed squarely at helping sponsors shape a more satisfying, long-term outcome for their participants.
SPONSOR EXPECTATIONS
To understand that opportunity — as well as how sponsor expectations are setting the bar for existing and aspiring DC-focused advisers — let’s consider how we got here.
In DC’s early days, a key benefit promised to participants was the freedom to choose their own investments.
In practice, it wasn’t necessarily a blessing. Few participants have the time, inclination and insight needed to sort through investment menus with dozens, even hundreds, of funds.
Experience, behavioral finance and the Pension Protection Act of 2006 have now encouraged a swing toward simplification. Freedom of choice remains, but default options — particularly target date funds — auto-enrollment and other automatic tools are helping nudge participants into smarter choices, better habits and, I think, more-successful retirement preparation.
But simplification has changed the game for advisers. Those serving the employer retirement plan market need to provide guidance on increasing participation and fulfilling fiduciary obligations, the differences among the many target date funds available, existing and emerging regulatory directives, and fee disclosures, among a host of other areas.
The BlackRock/Anova survey illustrates the “table stakes” that the best retirement plan specialists have established and also defines some key prerequisites for establishing a successful practice with a DC retirement plan focus.
Here are some highlights of what was found:
Plan sponsor satisfaction with top retirement plan advisers clocks in at 91%. The message is clear: It won’t to be easy to win clients away from specialists.
Ease, ideas, value drive satisfaction. Frequent investment menu reviews are also key to sponsor satisfaction.
Fiduciary responsibilities rate high. Asked to rate the importance of adviser services, 60% cited investment menu selection, 47% said managing fiduciary responsibilities, and 42% mentioned understanding plan and participant goals.
Provider, record keeper impact minimal. Satisfaction with them has very little impact on satisfaction with advisers. Plan sponsors clearly understand the discrete set of services they expect their advisers to deliver.
Strong cross-sell opportunities. 41% of plan sponsors indicated an interest in investment advice for their participants, with 35% interested in retirement income solutions and 33% looking for financial planning services.
SPECIALIZE OR PARTNER UP
DC has continued to grow and evolve, becoming a discipline unto itself that increasingly calls for focused expertise.
Even questions about the investment menu revolve increasingly around selecting target date funds, which are available on nearly 80% of DC plans.
The message to advisers looking to work in the DC space? Either dig in to understand best practices, or actively seek out partnerships with retirement plan specialists as part of a cross-selling strategy.
Whichever path advisers choose, the opportunity is there for those who can deliver the guidance and service that plan sponsors value most today.
Chip Castille is managing director and head of BlackRock Inc.’s U.S. and Canada DC group.
January 04, 2012 -Consensus is a new benchmarking tool to help retirement plan advisers gauge client satisfaction.
New York Life Retirement Plan Services, a provider of retirement solutions, is offering a service for retirement plan advisers called Consensus. The service is powered by Anova Consulting Group, a financial services market research and sales training firm.
Consensus will allow retirement plan advisers to evaluate client satisfaction levels and will generate quantitative and qualitative feedback on adviser service delivery. It will also provide segmentation analysis, benchmarking against other advisers, and identification of at-risk and satisfied clients.
“We want to drive better outcomes for our advisers, sponsors and participants, and we see Consensus as a natural complement to our ongoing focus on client satisfaction,” said Patrick Murphy, managing director of sales at New York Life Retirement Plan Services.
The service asks sponsors to rate their adviser using more than 50 criteria ranging from quality of service, to communication frequency, to their willingness to recommend their adviser to another plan sponsor. The adviser receives a customized report that aggregates their data in perspective of industry standards and provides qualitative feedback, according to Murphy.
Advisers do not need retirement plans on New York Life’s platform in order to participate.
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