One of your most important jobs as an employee benefitsfinancial professional is helping clients choose a new retirementplan service provider. It can be a complex undertaking—part art,part science.

However, the process offers a great opportunity to build on yourrelationship with your clients, further understand their needs andhelp them—and their participants—make the most of this valuablebenefit.

A standard RFP is a place to start—notfinish

Clearly, no two clients are exactly alike. Yet many providersearches rely on pre-formatted online request for proposal (RFP)forms. While these templates may provide a good starting point fora provider search, they shouldn’t be the only information used.

After all, templates often focus only on standard services thatare already made available by most providers these days. Andtypically, templates don’t capture important qualitativeinformation—including an assessment of each provider’s ability tomeet the needs of all employees, from the youngest workers to thosepreparing to retire.

Explain the sponsor’s needs in the RFP

As you customize a client’s RFP, it’s a good idea to outline thefactors that are driving the search and the selection criteria. Therisk in withholding this information is that the providers’ RFPresponses may feature the wrong aspects of their strengths. Statingthe objectives of the search upfront and asking questions specificto the plan and participants’ needs can help produce more usefuland meaningful responses.

Ask questions that assess the sponsor/providerfit

In their paper, “Finding Best Fit in a Retirement Plan ProviderThrough the RFP Process,”[1]Harry Koolen and Jim Reed identify what they call the “3 P’s ofFit,” which they’ve determined to be essential to successfulsponsor-provider relationships. The “3 P’s of Fit” are:

• Philosophy fit. There should be an ideologicalmatch between the provider and the plansponsor.
• Product fit. There needs to be an alignmentbetween the mix of products available and the actual needs of theplan participants.
• Personal fit. The final piece in establishinga “fit” is a willingness on the part of each party to build aworking relationship.

Assessing “fit” goes back to outlining the plan sponsor’sselection criteria in the RFP. Ask providers to explaincapabilities, services and possible solutions that can help theplan sponsor achieve their unique goals and objectives. Forexample, how will the provider support plan participants in makingtheir decisions on distribution strategies? This is the type ofhelp that an experienced, dedicated provider will generally beeager to provide.

Next step: Meet face-to-face

After you and your client whittle the candidates down to thefinalists—based on written responses to the RFP—it’s time toschedule meetings. A scorecard of some kind will help the groupevaluate each provider’s presentation.

The scorecard should rate products, participant education,fiduciary support and online capabilities. It can also help youcompare responses as you look for an understanding of the plansponsor’s concerns by the provider giving the presentation.Finally, make sure your client understands how the provider makesits money and how they keep plan costs under control.

The final decision

When it comes to making a decision, revisit the plan’s goalswith your client. The chosen provider needs to be willing—andable—to assume those goals as their own.

Look beyond the quality of the materials and presentationbinders, and focus on the actual services and possible solutionsavailable to help your client—and their participants—meet theirgoals. Independently verify what was asserted and what waspromised.

Then look at the cost. Benchmark it to the current plan expensesand then to the industry’s. This will help ensure that expectedcosts are competitive.

Success is in the details

A successful provider search rests on the details. That’s whythe search process needs to be more multi-dimensional than astandardized questionnaire and a canned sales presentation. Tolearn more about creating a successful service provider searchprocess, read the white paper from The Principal^®,“Making it Personal When Conducting Provider Searches for PlanSponsor Clients.”

[1] Harry Koolen and Jim Reed, “Finding “Best Fit” in aRetirement Plan Provider Through the RFP Process,”401khelpcenter.com