The critical importance of thought leadership for RPAs

Some retirement plan advisers still believe that providing good customer service is enough to retain 401(k) and 403(b) clients and offering “triple F” features — funds, fees and fiduciary support — is enough to win business. During the Covid-19 pandemic, the necessity of being a thought leader in retaining and winning business became even clearer to successful RPAs.

Case in point: Joe DeNoyior, practice leader at Washington Financial and now president of Hub’s retirement and wealth division, sent out regular briefings immediately after the pandemic hit about how plan sponsors should respond.

One human resource professional who attended one of DeNoyior's training programs forwarded these briefings to their chief financial officer. Without meeting the senior executive, DeNoyior won the plan. As the CFO said, “This adviser is doing more for us than our current one — and he’s not even getting paid.”

Providing good, responsive service is not as important as it used to be to retain clients. If a plan sponsor believes that its RPA is bringing new ideas keeping the company current on important trends and regulations, along with providing good service, the chances of the sponsor leaving are greatly reduced.

The importance of a relationship diminishes as plans get bigger or the plan sponsor becomes more aware of what a good adviser does and what to ask for.

Enlightened plan sponsors use the ELI method to rate their RPA:
• Ethics. This is pass or fail.
• Leadership. Does the RPA proactively bring new ideas?
• Impact. Do the ideas that are implemented have a positive impact on the plan, the organization and employees?

Think about your doctors. Do they proactively set up wellness checkups rather than just responding to calls or dealing with illnesses? Are they recommending changes to diet and lifestyle based on test results, suggesting new therapies and ideas? Would you ever leave a doctor who does? Would you be willing to pay more?

There’s a chasm among record keepers. The bare-bones providers may cost less and provide adequate service and record-keeping technology. But think about the quality of their wholesalers and the lack of innovative and impactful applications that help RPAs and their clients as workplace retirement platforms transform into full-service financial wellness centers.

Years ago, an RPA at a broker-dealer event said that he finally agreed with me that he should become a thought leader and he asked me how. I sarcastically asked, “Do you have any thoughts?” Joking aside, RPAs need to define their mission and core competency. Today, almost everyone can provide basic services while offering responsive customer care.

How do you distinguish yourself? If you met a prospect at a social gathering, how would you respond when they asked what you do?

To be a thought leader, RPAs need to create or use high-quality content. Ideally, RPAs get their content published or speak at industry events. Though social media is important, we have all learned that it is not necessarily reputable.

Creating a mission statement can seem trite, but if you don't understand what value you bring to 401(k) and 403(b) plan sponsors, you are at risk of losing clients and not winning new ones. Having a plan developed with key professionals in your group to be a thought leader, based on your core competencies and value, along with a strategy on how to get the message out on a regular basis, is no longer a luxury — it is an essential part of being a successful RPA.

[More: The new normal for RPAs post-pandemic]

Fred Barstein is founder and CEO of The Retirement Advisor University and The Plan Sponsor University. He is also a contributing editor for InvestmentNews’​ RPA Convergence newsletter.