How have RFPs changed over the past five years? National Association of Plan Advisors (NAPA) surveyed members last week and the results were illuminating, to say the least. Among the findings:
- More plan design questions
- We receive more/more often than we did 5 years ago.
- More often, more credible, more insightful than ever before.
- Shortened, with more emphasis on client service
- Much more concise.
- Fewer really full scope RFPs, more RFIs.
Most Important Questions
Readers also provided suggestions as to what they considered to be the most important question on the RFP, including:
- “How many clients do RMs have?”
- “Customer service, past history with compliance issues/help for customers with compliance issues, and a standard fee grid.”
- “The 3 most important are experience w/ plans of our size and type, services offered (related to what we receive currently) and what should we consider upgrading to, and lastly fees. Experience, Services and Fees.”
- “A series of question that helps answer the following question: What kind of experience do you have with plan sponsors just like us?”
- “Questions relating to responsiveness and client communication, and the expectation of same.”
- “It depends on the client,” noted one reader. “Typically, the most important question is the one that is the one that is most meaningful to the plan sponsor. I can’t think of a single question we ask that is consistently the most important question. We have clients that have issues with administration so that is the most important area to address, whereas others are concerned about the participant experience.”
Missed ‘Takes’
But what about the question(s) that is most often “missed,” either in terms of the “right” answer, or a (fully) truthful one? Here’s a sampling:
- How many clients do RMs have?
- Average client tenure.
- How many lost clients in the last 3 years.
- Not providing thoughtful feedback on the current plan.
- Any question surrounding plan retention.
- The toughest part is comparing apples to apples. Whereas someone’s bps fee might look competitive, if a plan typically has 300 distributions a year and if a provider is charging for distributions and another is not, that can be a significant income to provider. What do they charge for mailing notices?
- What are the few key areas that differentiate you from competitors and how do those characteristics tie into your organization’s long-term profitability/viability goals?
- How much will the record keeper make on the plan? Despite all efforts at disclosure, they hide revenue very well and are incredibly creative at creating revenue.
However, one reader – who is “on the other side” (the responder) said that “sometimes the questions are not at all clear and difficult to interpret – I am sure those receive the most ‘wrong’ answers!”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
