CONCEPT & STRATEGY
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ERISA ADVISOR EVALUATOR
The ERISA Advisor Evaluator (EAE) is an unbiased and independent online RFP service designed to help plan sponsors find, contrast and evaluate qualifying retirement plan advisors who meet minimum standards. The low cost EAE is also a powerful marketing tool for qualifying advisors.
By professionalizing the advisor selection process, the EAE Program will have a major impact on the industry. As consolidation intensifies and fewer advisors service plan sponsors, the EAE and expense analysis will eventually put a floor under advisor pricing.
While less than 10% of advisors qualify to participate, advisors who do participate in the EAE Program will be on the right side of history and positioned around the wellhead of new business generation.
As an innovative marketing tool, the EAE Program will differentiate expert advisors from generalists, something they cannot accomplish on their own. Within a short period of time, plan sponsors will begin asking incumbent and soliciting advisors if they are EAE members. In short, the EAE is the low cost path to differentiation, lead generation and business development.
To participate in the EAE Program, advisors should complete and return the advisor application form below along with payment. The cost to participate in the EAE Program for one year is less than the cost of a telemarketing service for one month.
|Minimum Criteria||Advisor Application
||Advisor User Agreement|
Regardless of any delegation or third party fiduciary assignments, sponsors are responsible for selecting and monitoring advisors on a periodic basis.
Few plan sponsors are fully cognizant of their retirement plan duties under ERISA. While these duties are rarely prioritized, the law requires fiduciaries to implement a prudent process for selecting, evaluating and monitoring advisors. Unfortunately, few sponsors have the skills or information to evaluate advisors. Until the development of the EAE Program, industry guidance has also been lacking.
In addition to professionalizing the advisor selection process, the low cost, convenient, easy to use EAE will increase the sponsor's efficiency, reduce their burden and provide risk mitigation by documenting a prudent process for the retention of advisory services.
Given corporate staff reductions, increased liability and the decline in sponsor satisfaction, the advisor's role has never been more important. In addition to fiduciary risk reduction, the engagement of an "expert" retirement plan advisor should facilitate a more competitive program for participants.
Ongoing business development is the biggest challenge facing advisors. Burdened with noise and client service, most advisors lack the time, budget and marketing skills to grow their business. Given that advisory services are increasingly viewed as a commodity, advisors must distinguish themselves to succeed. To prosper, advisors must also reach a larger audience, create awareness, develop brand and increase activity.
In addition to a no growth environment, the financial services industry and the retirement plans market have matured. As a result, participating in the consolidation of advisory services and the professionalization of advisor selection is a primary path to growth.
Beyond helping sponsors with their fiduciary duty to identify, select and monitor qualified advisors, the game changing, cost effective and compliance friendly EAE will also help qualifying advisors differentiate and grow their business.
To measure effectiveness, the CFDD will maintain information on who is using the services, the number of searches, popular search criteria and list why the winning advisors were selected.
EAE MARKETING STRATEGY
Integrated Websites, Branding & Promotion:
To drive business to qualified advisors participating in the EAE Program, the CFDD will use a multi-layered and sophisticated marketing strategy that includes push, pull and leveraged marketing. In addition to direct, indirect and collateral marketing, the integrated strategy includes three different websites, two newsletters and multiple target markets.
The CFDD website, The CFDD Internet Broadcast Radio Station and the upcoming EAE website are diverse platforms with different targeted markets. All three content rich platforms focus on the retirement plans market. To maximize brand awareness and promote advisors participating in the EAE Program, all the websites are integrated for business development purposes.
While the CFDD's website is designed to support retirement plan advisors, vendors and promote the CFDD's Advisor Conference, the upcoming EAE website is designed for plan sponsors, advisors participating in the EAE Program and professional intermediaries involved in the advisor selection process.
The new EAE website, www.ErisaAdvisorEvaluation.com, will include secure and non-secure areas for sponsors and advisors. Like the CFDD website, the EAE website will include valuable resources, links and host a new EAE Newsletter. An EAE advisor RFP search demonstration will also be available to plan sponsors, but access to the EAE’s RFP system, including the EAE Advisor Profile (PDF file), is limited to "paid" plan sponsor clients.
The CFDD Station is an Internet Broadcast Radio Station with six different channels devoted exclusively to retirement plans content and it will play a role in the marketing of the EAE Program.
The CFDD Station was designed for the entire retirement plan market, including sponsors, participants, the media, vendors and other professionals. Unlike the CFDD and EAE websites, all content on The CFDD Station is available on demand 24/7 without cost or restriction.
EAE & EXPERT RETIREMENT PLAN ADVISOR PROFILES
To maximize advisor exposure and search engine traffic, we have developed two highly marketable advisor profiles. The EAE Advisor Profile (PDF file) is a downloadable document while the Expert Retirement Plan Advisor Profile is a dedicated internet broadcast webpage (DIBP) hosted on The CFDD Station.
The EAE Advisor Profile:
The EAE Advisor Profile (PDF file) was designed to be informative and a powerful marketing tool. The document may be distributed at the advisor's discretion and posted to the advisor's website.
In addition to other pertinent information, the EAE Advisor Profile displays the CFDD's qualifying seal, recognition that is exclusive to participating advisors who meet the EAE's minimum standards.
The EAE Advisor Profile is designed to provide plan sponsors with a meaningful snapshot of the advisor's experience, education, credentials and team depth. In addition to other information in the EAE system, sponsors will use the EAE Advisor Profile as a guide for selecting advisor candidates to score, query and interview.
Click HERE to View A Sample
The CFDD Station's Expert Retirement Plan Advisor Profile:
The contact information on the first page of the EAE Advisor Profile document mentioned above includes a link to the advisor's dedicated internet broadcast page (DIBP) on the Expert Retirement Plan Advisors channel on The CFDD Station.
In addition to their categorized geographic listing, the DIBP includes a photo, title, bio, company description, logo and link to the advisor's website. An "optional" audio interview designed to summarize the advisor's value proposition may also be posted on the site.
To enhance exposure, advisors may post business development videos to their DIBP and post a link to the same dedicated page on their own website. Similar to the EAE Advisor Profile, advisors may viral market a link to their DIBP.
In addition to on demand availability without cost or restriction, the descriptive copy on the DIBP is Meta-tagged to maximize search engine optimization. The on demand content is also downloadable, forwardable, portable, linkable and benefits from cross station/platform traffic as well as aggregated RSS feeds on business journal websites across the country.
As an added bonus, scrolling TV monitors include each expert advisor's photo, name and a link back to the Expert Retirement Plans Advisor Channel at: http://www.bmbc.tv/channels/6. For maximum exposure, the TV monitors are located on the CFDD website homepage at: http://www.thecfdd.com/home and The CFDD Station homepage at: http://www.bmbc.tv/stations.php?n=3. The monitors will also be placed on the new EAE website.
In terms of showcasing their skills, providing unmatched exposure to plan sponsors and growing their business, no other strategy or expenditure can match the marketing power of the EAE Program.
To View The Profiles On The Expert Retirement Plan Advisors Channel, Go To http://www.bmbc.tv/channels.php?n=6.
CFDD DIRECT & COLLATERAL MARKETING INITIATIVES
CFDD Direct Marketing:
To drive business to advisors in the EAE database, the CFDD will market the EAE Program to plan sponsors, centers of influence and advisors. The marketing effort includes:
- Sponsor Branded Alliance Partners
- Sponsor Organizations
- Trade & Other Media Outlets
- Columns, Guest Articles & White Papers
- Academic Initiatives
- EAE & CFDD Newsletters
- CFDD Guide On "Evaluating Retirement Plan Advisors"
- Direct & Indirect Email Campaigns
- RFP Exposure For Advisors
- Scholarship & Vendor Vetted Programs
|In addition to the three different integrated websites and two different newsletters, the CFDD will initiate ongoing email campaigns directed to plan sponsors, ERISA attorneys, CPAs and other centers of influence. The unique campaigns are designed to increase brand awareness and drive opportunities to qualifying advisors.|
Designed to play a key role in our direct marketing efforts, the EAE Newsletter will focus on advisor selection standards, the rise in fiduciary breach claims, settlements and litigation.
To compensate for their fear of the unknown, sponsors often make emotional decisions and award business to existing relationships. To facilitate a more prudent process, the EAE Newsletter will highlight the sponsor's duties, legislative & regulatory requirements, liability, vulnerability and prohibited transactions (including the hiring of relatives). It will also provide motivation, solutions and tips on how to evaluate advisors.
The newsletter will be broadly disseminated to the CFDD's network, plans sponsors, ERISA attorneys and other centers of influence. Carefully crafted over many years, the CFDD maintains the industry's most comprehensive list of ERISA attorneys.
To enhance exposure, each EAE Newsletter will be repackaged specifically for plan sponsor driven websites and publications, including Workforce Management, CEO, PlanSponsor, P&I, Institutional Investor, etc.
|Given the marketing importance of the EAE Newsletter, it will not be another plain vanilla publication. Leveraging decades of industry specific knowledge and the industry’s most extensive network of qualified experts, the EAE Newsletter will be focused, authoritative, motivational and solutions oriented.|
The EAE Newsletter will do what advisors have not been able to accomplish, force plan sponsors to acknowledge the fiduciary duty, vulnerability and personal liability associated with the selection, evaluation and monitoring of advisors. Because the EAE Newsletter will be repackaged and widely disseminated to the nation's ERISA attorneys and auditors, it will have a powerful impact.
Valuable Collateral Marketing For Advisors:
In addition to the EAE Advisor Profile (PDF file), the dedicated Internet broadcast page (DIBP), the TV Monitors on multiple websites and our direct marketing, we have developed optional template materials for advisors to use.
The exclusive collateral template program will play a key role because it will promote the advisor's qualifying status and generate direct leads. The collateral marketing will also leverage the "halo" effect and create brand awareness of the EAE Program.
The collateral marketing material for advisors participating in the EAE Program is a key component of the overall marketing strategy, but the material will not be released until the direct marketing efforts have generated brand awareness.
ADVISOR DUE DILIGENCE: EVOLVING & MATURING
While due diligence, profiling and background checks on advisors are still in the embryonic stage of use, they are gaining momentum as the professionalization of the advisor selection process evolves.
While ERISA section 411 requires a background check, plan sponsors have rarely, if ever, performed background checks on advisors. However, to reduce risk and satisfy their ongoing fiduciary duties to monitor advisors, sponsors are beginning to request individual reports and background checks on incumbent advisors.
In addition to the growing demand for risk mitigation by plan sponsors, vendors are starting to express concern over the liability associated with the sale of specialized products by generalists, the lack of service standards, sponsor dissatisfaction, increased broker of record turnover and the loss of direct sold business.
To offset liability and help direct sold plan sponsors identify qualified advisors, vendors are starting to perform due diligence on advisors and their firms. As a sales aid and productivity enhancer, wholesalers & TPAs are also expressing interest in advisor profiling.
EXCLUSIVE INSURANCE SERVICES
Because ERISA does not require it, most plan sponsors lack fiduciary liability insurance and most advisors lack E&O coverage for fiduciary services provided to ERISA plans. As part of their due diligence, sponsors must ensure outside vendors have professional liability insurance and the proper coverage for services rendered to ERISA plans.
B-Ds generally require affiliates to purchase their E&O coverage through the firm. Unlike other professional practices, coverage varies widely in the financial services industry and the policy may not be available for review. The carrier may also be reluctant to provide concrete evidence of coverage. Unfortunately, proof of coverage cannot be satisfied by a simple Certificate of Insurance (COI). The only way to determine if coverage is adequate for the services rendered is to read the policy.
Because E&O insurance is a specialty, these policies must be reviewed by independent insurance brokers who specialize in this area and have industry specific knowledge. As a major value add, plan sponsors and advisors participating in the EAE Program may have their policy coverage and bonding reviewed by our alliance partner, NAPLIA.
As an additional value add, sponsors and advisors using the EAE Program are also pre-qualified to receive a significant discount on their coverage, a discount that may exceed the cost of participating in the EAE Program.
ADVISOR BACKGROUND CHECK/ ERISA 411 SOLUTION
Most plan sponsors lack the expertise and/or information required to evaluate advisors. Even though ERISA 411 requires it, very few plan sponsors perform background checks on their advisors. To meet this need, the EAE Program offers an "optional" advisor background check.
The level of risk associated with the advisor's role should determine the depth of the background check. The advisor background check does not include fingerprinting, but the FBI quality report does include professional licensing, criminal background, bankruptcies, judgments and liens.
While full disclosure and transparency have never been more important, advisors must give their permission before a background check can be initiated. The advisor would also see the report in advance and be given the opportunity to correct any inaccuracies. The service is not designed to undermine advisors, but rather document the required prudent process for advisor selection.
Consistent with the higher standards of ERISA and a maturing industry, the CFDD's independent, efficient and cost effective EAE is the only service that imposes minimum standards and provides meaningful due diligence on advisors, insurance policy reviews and advisor background checks.
THE EAE PLAN SPONSOR PROCESS
The EAE Program provides plan sponsors with a searchable database of qualified retirement plan specialists. The online EAE tool is designed for plans of all sizes and while it contains standardized RFP questions vetted by industry experts, sponsors will have the ability to add, delete, modify or customize their questions.
Participating advisors will have the flexibility to pre-populate, save and retrieve the standardized questions. This is important because polished responses play a major role in the selection process. They also take time and may have to be approved by compliance.
In addition to the RFP, the base sponsor service will include training & tutorial components, meaningful links and downloads. An optional consulting service will be available on a fee basis to assist sponsors with RFP development and management. The consulting service will not include advisor evaluation.
Once the RFP questionnaire is completed, the advisors selected by the plan sponsor will be given a fixed amount of time to populate the RFP using a web-hosted system. Upon receipt of all data, sponsors may access an automated scoring system that permits them to weight the responses based on customized preferences. Once the process is complete, sponsors may request additional information or download and forward the report to committee members.
The plan sponsor user fee is tiered by size and complexity. Base pricing includes five (5) advisor responses and access to the online RFP tool until the search is completed or up to one year. Additional advisors may be included in the search for an incremental fee.
Advisors listed in the EAE database will incur a nominal annual fee. Additional team members housed in the same office may also participate at a reduced fee.
While the sort function allows the plan sponsor to determine their own criteria, advisors must meet the CFDD's minimum criteria to participate. If the advisor operates as a solo practice, the criteria will apply to the individual advisor. If the advisor is part of a team, the criteria would apply to the group, but each advisor will have a separate listing.
Determining the minimum criteria was somewhat challenging because fiduciary standards are evolving. To remain neutral, the minimum criteria was extensively vetted and designed to meet the needs of multiple market segments, including the small plan market. The minimum standards were further designed to meet the needs of individual practices, teams, independent firms and advisors with broker-dealer affiliations.
In addition to meeting the minimum criteria, each advisor must complete a standardized questionnaire profiling their book of business, expertise and services offered. In addition to other information in the system, the EAE Advisor Profile will be used by sponsors for search purposes, sorting and standards-based selection purposes only, i.e., confidential information will not be included in the profile. As noted above, the EAE Advisor Profile may be downloaded and forwarded to plan sponsors for marketing purposes by the qualifying advisor.
Upon completion of the profiling questionnaire, brochures, bios, articles, awards and other pertinent information showcasing the advisor's skills may be uploaded to the EAE system. In other words, the upload flexibility will be an additional powerful and no cost marketing tool. To protect proprietary material, access to the profiling questionnaire, brochures and other uploads will be limited to sponsors.
Both sponsors and advisors are expected to read and accept the conditions. If the advisor declines the RFP, a reason must be provided. When an advisor is no longer under consideration, the sponsor must also provide a reason.
EAE PROGRAM SUMMARY
Given the integrated, layered and sophisticated nature of the EAE Program and marketing strategy, the primary components of the program are summarized below:
- EAE Website
- EAE Newsletter
- EAE Advisor Profile (PDF file)
- Dedicated Internet Broadcast Page (DIBP)
- TV Monitors Featuring Participating Advisors
- Plan Sponsor Profile
- RFP Advisor Searches/Evaluation Reports
- Direct & Indirect Marketing
- Collateral Marketing
- Advisor Background Checks
- Insurance Policy & Bonding Review
DCIO & PLATFORM PROVIDER CONSOLIDATION ROLE
In a mature market, consolidation and differentiation are the path to growth. Rather than focusing on experts who are more knowledgeable, efficient and profitable, vendors often adopt marketing plans designed to turn generalists into specialists. Given that plan sponsors have a fiduciary obligation to retain experts, allocating resources to generalists in a zero sum game is an ineffective strategy.
Because vendors operate with tight budgets, marketing dollars should be directed towards initiatives that produce the highest ROI. The best opportunity to increase returns is to invest in initiatives that support experts who are loyal to DCIO managers and platform providers, rather than generalists who lack loyalty and ERISA plan knowledge. Given the sharp jump in broker of record turnover – an indication of sponsor dissatisfaction - positioning generalists to take business from other generalists in a new world of disclosure that links fees directly to services rendered is simply nonsensical.
By participating in effective consolidation strategies for expert advisors who have NO time for marketing, DCIO and platform providers can play a unique role in the consolidation of retirement plan advisory services.
One effective strategy is a DCIO or platform provider branded white paper that articulates ERISA fiduciary selection standards for retaining qualified advisors and the names of advisors who have met the vendor’s qualifying standards. This type of third party endorsement of expert advisors establishes a threshold that generalists can’t meet. It also distinguishes the qualifying advisor's value proposition from a promotional standpoint, something advisors are unlikely to accomplish on their own.
The EAE is an effective differentiator destined to facilitate consolidation. DCIO managers and platform providers can use the EAE to develop a directory of pre-approved "expert" retirement plan advisors for referral and marketing purposes. By creating proprietary Preferred Advisor White Papers, vendors can establish a leadership role, promote fiduciary standards, build brand, advisor loyalty and drive business to the advisors most likely to bring them business.
For more information on how the EAE can help vendors grow, differentiate, assume a leadership role, build deeper relationships, improve margins and generate multi-level business through the EAE Program, contact the CFDD by phone at (630) 662-0284 and/or by email at CFDD@TheCFDD.com.