Best practices for your next 401(k) RFP to assess relationship management
Many of the questions that are asked in a recordkeeping request for proposal (RFP) haven’t changed much over the years. But retirement plans have changed quite a bit, as have the regulations, technologies, and processes that shape plan sponsor expectations. The next time you send out an RFP, consider new questions you might use to assess the value and service you can expect from your new recordkeeper and relationship manager.
The changing role of the retirement plan relationship manager
I’ve spent most of the last 25 years working with retirement plans, in earlier years as a relationship manager and now as the leader of a large service team. As a result, I’ve seen the industry evolve from defined benefit to defined contribution, with related improvements in plan design, products, and services riding the waves of continual legislative changes and numerous market cycles.
The evolution continues, with trends that affect the plan sponsor and the relationship manager:
- Technology enhancements, big data, and digital delivery drive customer expectations for self-service.
- The increasing complexity and breadth of products and services within a retirement program require extensive knowledge.
- Changes in influencers and the elevation of retirement plans within a benefit program demand an extensive skillset.
A good relationship manager can bring invaluable perspective to the table, with a nuanced role that straddles the line between strategy and tactics and employs a broad set of skills—but as the industry has changed, so has the role of a relationship manager.
The questions we often see in RFPs, however, trying to assess the expected level of service haven’t always kept up with the changing industry norms. And although today’s virtual work environment may have been brought on by the COVID-19 pandemic, some of the related changes may remain long after we’ve put the virus behind us. As a result, there are new and, perhaps, more relevant questions we need to be addressing.
How to measure a relationship manager’s success
For years, RFPs have asked how many in-person meetings a relationship manager will commit to annually or how many plans they manage—and every respondent tries to position the story they believe the reviewer wants to hear, which doesn’t always align with reality.
But the number of in-person meetings isn’t the sole metric for service—especially now, as all meetings have become virtual. And some plans are more complex to manage than others, making that number even less meaningful in some cases.
As the financial professional advising a plan, how can you reasonably assess in an RFP the service you and your customer can expect from a recordkeeper? I’ve put together a few questions that I'd suggest may help you better understand and differentiate how providers think about and deliver service.
- How would you describe your service culture and commitment to the customer?
- How do you define a retirement program’s overall measure of success?
- How do you drive/achieve that success within the context of a sponsor’s organizational goals?
- How do you proactively address customer challenges before they become problems? What’s your issue resolution process when something does go wrong?
- What’s your approach to bringing ideas and opportunities to improve a program over time?
- How will you ensure the plan sponsor and its employees are able to take advantage of all you have to offer—and constantly challenge them to adopt new and relevant tools, technologies, and services as you make them available?
- How do you personalize service delivery? Can you adjust your service model to meet the plan sponsor’s preferences?
- How will you provide your unbiased expertise, even if it challenges the status quo?
- How will you advocate for the participants in the plan—from the business owner to the person on the line?
- How do you deliver personalized service at scale? What tools/processes exist within your organization to enable the service team to do so?
- What are the net promoter/customer satisfaction scores for your service team? How do you track customer satisfaction?
The questions I ask my team—You should ask them, too
These are some of the same questions I ask potential candidates when I’m interviewing people to join our team. They aren’t always easy questions to answer, but they’re the ones you should be asking potential recordkeeping partners.
Our team strives to provide customers with a high level of service, based on individual needs and expectations and in line with desired outcomes. The number of customers they support, meetings or dinners they host, or interactions they have, in and of themselves, are not key indicators of good service—rather, things such as customer satisfaction, the quality of ideas and execution, ownership/accountability/advocacy, and plan and participant outcomes are. And as our business partners and customers may increasingly express a preference for virtual meetings over in person when we return to “normal,” those traditional metrics could become even less relevant. So, instead of asking my relationship managers how many meetings they attended, we ask them things such as “what was your customer’s goal, and did you achieve it? Did you make a tangible impact on a plan professional’s ability to retain their customers, and did you provide insight to help them expand their business?”
An opportunity to update the benchmarks for servicing a retirement plan
As leaders in the retirement industry and the financial professional community, we have an opportunity to rethink how we evaluate the role of the relationship manager—moving away from dated, less-relevant metrics, and toward measurements of efficiency, quality of service, and outcomes delivered.
Important disclosures
MGTS-P42925-GE 09/20 42925 MGR0902201314546
