Plan advisers want cost info first when talking to wholesalers

For fund wholesalers, courting the retirement plan adviser will require a whole new set of skills and pitches that differ vastly from what they bring to discuss retail products. Financial advisers who concentrate on the defined-contribution space happen to have a different spectrum of concerns for asset managers and wholesalers to address, making them expect even more from mutual fund companies, according to a kasina study. Fees and expenses are at the top of the list when plan advisers meet with wholesalers to discuss plan investment options, with performance coming second, according to the survey. Meanwhile, risk takes a back seat to both of these aspects. For advisers who focus on retail business, on the other hand, risk is the most important criterion when evaluating an investment. Correlation to other assets comes in second. “It makes you think about investing for retirement plans versus constructing a retirement portfolio,” said Hari Krishnaswami, product manager for kasina LLC's adviser research. “The retail client might have other goals, as well, and that's why risk is so important.” Retirement plan advisers are also less accepting of white papers, online calculators and training programs — the usual items they might see from wholesalers. About 86% of the 459 surveyed advisers said they don't consider these extras to be very important to their defined-contribution business. Instead, they're more interested in building their DC business and expanding their pool of assets, seeking help with client referrals. Advisers also seek tools and ideas for prospecting new clients, Mr. Krishnaswami said. Finally, plan advisers have preferences on how they choose to receive their marketing materials from wholesalers, with 61% wanting to get their sales ideas via the web. Items they can share with plan sponsors, such as investment fact sheets and education brochures, are largely preferred in hard copy, as indicated by 70% of the advisers. “Major asset managers are taking seriously the need to have specialized wholesalers and a specialized message,” Mr. Krishnaswami said. “The quality of the marketing makes a difference and influences advisers' decisions.”