Defined contribution investment-only providers have a leg up on their plan provider counterparts when it comes to the creative and aggressive techniques that they use to move their products, according to a new study by research shop Oculus Partners.
Cynthia Hayes, president, Oculus Partners, tells Money Management Executive there are three areas that DCIO firms have excelled in.
The first is the training of wholesalers. Hayes says DCIO wholesalers are more knowledgeable than bundled providers about the products they are selling and able to articulate the benefits to advisors and consultants.
The second area is the deployment of new tools that show advisors and consultants how their company's products fit into their investment architecture, stack-up against other products and how they can be used within their structure.
The third is DCIO providers’ sophisticated understanding of advisors’ and consultants' businesses.
Hayes says two companies that do all three of these very well are BlackRock and Franklin Templeton.
On the contrary, the 2012 Perspectives Study: Retirement Plan Consultants study also revealed that the majority of the consultants are concerned that plan providers don’t understand the consultant’s practice enough to create an effective sales and servicing partnership. They cite few examples of providers who get it right when it comes to understanding how to team with them, either in selling a new prospect, or managing an existing relationship.
They also believe that there are significant improvements providers can make in putting their best foot forward in new sales opportunities. For example, they say that providers need to articulate a clear value proposition relevant for that prospect, follow the consultant’s agenda and better address the prospect’s issues and needs. Consultants prefer that a relationship manager (RM) lead the finals presentation rather than a salesperson so that chemistry between the RM and the prospect can be determined.