Broaching the topic of fees with plan sponsors is a data-fueled art. Transparent fee conversations can help build trust and contribute to a plan’s long-term success. As an advisor, your ability to broach fee discussions effectively — and with finesse — can elevate your practice and help you win new business.
Adjust your approach. Kick jargon to the curb and tailor your talk to your audience. A chat with a new small business owner should probably look a lot different than a deep dive with a retirement plan committee or a seasoned CFO. Consider how you’d have the same fee conversation at a beginner, intermediate and advanced level.
Benchmark better. Fee discussions require context and comparisons to be meaningful, and benchmarking data is perfect for that purpose. However, an annual fee checkup does not require nearly the same level of detail as a three- to five-year live bid. PlanFees Total Fees Benchmarking offers a quick two-minute benchmark that analyzes whether fees are low, average or high relative to those of similar plans. And RFP Express provides high-speed instant quotes based on predetermined parameters and can generate custom quotes in as little as 24 to 48 hours.
Cost vs. value. There’s a huge difference between a bare-bones offering and white glove advisory service. Are you meeting more frequently with the retirement plan committee? Are you acting as a 3(21) or 3(38) fiduciary? Does the investment menu include alternative investments, guaranteed income solutions or other more complex instruments? Are you providing financial wellness programming? The lowest fees may not always serve a plan’s best interests. With Prism365, you can input and benchmark all your advisory services and frequencies, including custom services, so you can more easily document and contextualize value in a fee conversation.
Back to basics — strategy and goals. Always ground the conversation in the plan's strategic intent. Whether it’s embracing innovation or streamlining costs, make sure the sponsor understands how their own goals help shape the service menu, investment landscape and subsequent fees for their plan.
Clarity is king. Keep fee conversations simple and focused — don’t give anyone more information than they need to deal with whatever matter is at hand. Use PlanFees data visualizations to turn complex fee structures into more easily digestible narratives. Simplifying fee conversations aids strategic decision-making while maximizing efficiency and productivity.
The future is now. Urge sponsors to take a long view. Fee benchmarking is never a one-and-done deal; it's a vital, ongoing strategy that adapts to a changing financial and business landscape and helps keep the plan robust and compliant.
Conversations that Connect
Rather than dreading fee conversations, look at them as an opportunity to connect with plan sponsors on a deeper level. When handled with care, these discussions can help clarify objectives, illuminate value and strengthen client relationships. Because beneath the numbers lies a chance to forge a shared understanding about how reasonable fees are instrumental in delivering the tangible benefits that are key to a plan’s ability to serve the needs of participants and plan sponsors alike.