Be Your Best

Hurts So Good

By Tom Foster

Sometimes, the truth hurts. But the truth can also help us improve and take our game to the next level.

Constructive criticism is an example of how the truth can help make us better. A good example of such criticism is MassMutual’s Winning Combination research, which found that few financial advisors who serve retirement plans are able to articulate a value proposition that connects to employers. Most advisors who participated in focus groups as part of the research stumbled and fumbled when asked how they differentiated their services in the marketplace.1

Yet, the quantitative part of the Winning Combination research showed that employers knew precisely what they wanted from advisors.

The study showed that plan sponsors prefer to work with advisors who stress key capabilities such as educating employees about the importance of saving for retirement, delivering responsive customer service, and helping lower overall plan costs. Although not as many employers emphasized guidance about their role as a fiduciary, the study showed, it was clearly an area where advisors can add significant value.

So where do you start in creating a value proposition? What capabilities and services should you emphasize?

As part of effectively articulating your value, there are some key capabilities to define and explain in terms of helping plan sponsors and their participants. Those values should be highlighted, whether you’re meeting with sponsors one-on-one or making a group presentation.

Your value proposition should be in writing, a few pages of can-do propositions that inform plan sponsors how you can help make their retirement plan more effective and keep it on track. You should also leave your value proposition with a new client as your service offering.

The foundation of any good retirement plan starts with a needs analysis.  For instance, do you or your retirement plan provider have the capability to analyze data about participants to determine a plan’s overall health and effectiveness? As part of your practice, do you assess how the retirement plan fits into the company’s overall benefits package? Do you monitor industry trends and connect them to how the sponsor manages its retirement plan?

Investments are obviously core to what advisors do. But think about how you deliver investment insights and guidance. Do you promote investment diversification, conduct meetings to assess the overall investment program or discuss new or innovative options that may help participants reach their goals?

Educating employees is high on most employers’ list of advisor capabilities. But how you deliver that education can make a difference.  Explain what services you provide, whether you conduct group meetings, meet with participants individually or both, review progress to their retirement goals or even discuss more holistic benefits and financial planning.

Meanwhile, there is considerable confusion about the role of fiduciaries related to retirement plans. Some of the Department of Labor’s new fiduciary rules affecting retirement plan advisors have been delayed. Plan sponsors, on the other hand, are often unsure of their fiduciary duties; MassMutual’s Winning Combination study showed that a third of sponsors did not believe they were a fiduciary to their plan. So it’s an area where advisors can help inform and educate.

Advisors can help by clearly stating their fiduciary services such as if they work with a recordkeeper that offers the latest fiduciary investment protection services.  For instance, do you offer 3(38) or 3(21) fiduciary investment services?

Other areas for consideration for your value proposition are plan provider due diligence, prescriptive solutions to plan shortcomings and a mission statement.

While you can attempt to create a value proposition yourself, some retirement plan providers do provide support to help you create and even customize such a document. MassMutual, for instance, offers the, an online tool to help advisors differentiate their services. The value propositions asks a series of questions to take inventory of your capabilities, allows individualized descriptions, can be customized to address specific plan sponsor needs, and allows advisors to upload their photo and company logo.

The process of thinking through and creating a value proposition can help address the shortcomings expressed in the Winning Combination study. But page through the study and you will discover a silver lining: 93 percent of employers reported that their financial advisor is valuable and 94 percent reported they were satisfied overall.

Now, that didn’t hurt so bad, did it?



E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).

1The Winning Combination, January 2016,