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February 7, 2012 ( – Retirement plan sponsors who conduct marketplace reviews with finals presentations are 55% more likely to remain with their current provider today than they were as recently as four years ago.

According to survey data from Anova Consulting Corp., for the sales situations in 2011, 28% of mid-large market searches with between $20MM and $500MM in plan assets resulted in the plan sponsor remaining with the incumbent recordkeeper, compared to 18% in 2007. This figure does not include non-competitive re-bid situations, which are an increasingly commonplace alternative to a full search/RFP process for plan sponsors who are not necessarily dissatisfied with their provider, but conduct periodic due diligence reviews for fiduciary reasons.

“With the difficult economic environment of the past few years, most companies are more focused on their core businesses than with evaluating their 401(k) plans,” said Chris Cumming, senior vice president at Great-West Retirement Services. “Consequently, there’s been a slowdown in RFIs and RFPs, which leads to fewer finals situations, and even then sponsors have been more likely to remain with the incumbent.”

According to the plan sponsors, retirement plan advisers and consultants interviewed, one driving force behind this trend is the increasing commoditization of 401(k) product and service offerings in the mid-large market.

“As fee spreads compress and open investment architecture, state-of-the-art technology and customizable participant communications are offered by more competitors, sponsors are increasingly unwilling to undergo the uncertainty and additional effort of a conversion,” said Richard Schroder, president of Anova Consulting Group. “Results from the plan sponsor research we have performed over the past decade show a drop-off in provider changes due to core product offering differences—client service issues are now a key catalyst for provider changes.

“At Putnam, we’re seeing sponsors look to improve service delivery, or take advantage of innovation that didn’t exist three-five years ago,” said Edmund F. Murphy II, managing director and head of Defined Contribution at Putman Investments. “There is clearly a growing market demand for providers to deliver maximum value to plan sponsors and an enhanced participant experience that leads to higher savings and better retirement preparedness.”

Great-West has observed a similar trend in the mid-large market. “When sponsors conduct a finals process and switch recordkeepers, they are looking to upgrade their overall plan with the latest features and sophisticated investment capabilities while achieving a competitive price point,” Cumming said.

Another driver of the decline in 401(k) provider changes is sales-related. Failure to differentiate is a frequent sales process critique among bids lost prospects who elect to remain with the incumbent. “In an increasingly competitive marketplace with a finite amount of deal flow, sales teams really have to bring their “A” game to win the business,” suggests Schroder. “Before entering a finals presentation, I would urge any sales team to identify four or five ways in which they are different from the competition and articulate them during the presentation.”

Patrick Murphy, managing director and head of sales at New York Life Retirement Plan Services, added, “A me too” approach is not effective in sales finals presentations. Plan providers have to develop products and services with differences that are truly meaningful to plan sponsors. Those providers who can demonstrably add value and have an impact on plan results will be the winners going forward.”

For Immediate Release
Contact: Andrew Cloutier
Anova Consulting Group, LLC
(617) 731-1045

Anova Launches Study on Private Equity in DC Plans

BROOKLINE, MASS., May 22, 2013 – Anova Consulting Group, a leading market research firm in the financial services industry, announced today the launch of a new syndicated study entitled “Private Equity in DC Plans: Retirement Industry Perspectives”.

As private equity firms seek ways to tap into the individual investor retirement plan market and plan sponsors weigh various options to increase retirement readiness among their participant bases, Anova proposes  to  capture  the  perceptions  and concerns of key stakeholders regarding  the  potential introduction of private equity investment options onto DC platforms.

“Private equity funds and defined contribution plans have not historically shared much common ground, so it will be interesting to see how receptive plan sponsors, advisors, and plan providers are to the concept,’’ said Richard Schroder, president of Anova Consulting Group. “There are certainly some operational as well as cultural challenges facing private equity firms who wish to sell their investments in retirement plans, but there may also be opportunities, especially given the growth of target date funds and automated plan features.  This study will help to flesh out challenges and opportunities and create a roadmap with ideas on how the trend might play out.”

Likely subscribers to the study include private equity firms, retirement plan providers, and retirement plan consultants / advisors. This study will enable subscribers to:

  • Assess DC market awareness of / potential demand for private equity investing
  • Identify top areas of concern (and potential solutions) regarding key operational, technical, regulatory, and fiduciary issues
  • Investigate feasibility of various asset class categories and investment vehicles

About Anova Consulting Group, LLC

Established in 2005, Anova Consulting Group is a leading market research and consulting firm focused on the financial services industry. Through custom and syndicated market research studies, Anova provides strategic perspectives to its clients, driving better decision-making, product development, sales effectiveness, client service, and continuous improvement. Richard Schroder, president of Anova, is author of the Win Loss Analysis book titled From a Good Sales Call to a Great Sales Call (McGraw-Hill), which details how learning from post-sale debriefing helps close more sales.

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