Advisor RFPs : Structuring Your Requests to Make an Informed Decision

by Maria Stenina, Assistant Manager of Marketing and Operations – Oswald Financial, Inc. 

RFP stands for Request for Proposal. It is a tool that can help you, the issuer, to select the best fit of a firm to provide financial advisory services. Sometimes, there is also a request to benchmark and compare recordkeeping services and investment options that accompanies the RFP, depending on your particular situation.  An RFP is not just a tool to shop for advisory services, but a benchmarking tool as well; a way to evaluate your plan’s service providers, including the reasonableness of your fees and the level of service an advisor can provide. It is a good idea to conduct an RFP process regularly or when you suspect there might be some issues with your plan or current providers.

Why would you want to do an RFP and how do you begin?

There are multiple reasons and it’s important to establish your purpose and be clear in delivering your request to make sure that your needs are addressed in the responses.  Are you happy with your current advisor? Are you happy with your record keeper? Which areas of your plan do you think could be improved? Even if you aren’t out to make a change, knowing what options exist and industry trends can be powerful. While you can use an RFP template to build your request, it is a good idea to place more focus on what matters to you. Your potential advisor should be able to address your concerns are and provide suggestions for how the firm has leverage to advocate for you. Remember, generic questions often return generic answers, and those are hard to tell apart when you’re comparing advisors.

What should you look for in a response to an RFP?

Look for differentiators and extra resources! Ask the type of questions that allow the firm to establish what sets it apart. Is the firm a team or a one-person shop? How long has this practice been specializing in retirement plans? What roles does the support staff play, what are their specialties, and how does the structure allow the practice to grow going forward?

REMEMBER: People are a firm’s greatest resource and a great indicator of what your service experience will be like, as well as the type of relationship you will build within the partnership.

Ensure that the firm outlines its investment analysis process. It’s important that you understand how funds are scored, benchmarked and managed, what investment policy support is provided, what the investment research resources and capabilities are available. How is the investment watch list determined and when are actions taken in the case of underperforming investments? How will performance review meetings be handled and what can you expect?

Look at relationships with record keepers. Is the firm independent, meaning they are able to work with any record keeper that will best suit your needs? Which record keepers do they favor and why? How are vendors benchmarked? The quality of the advisor’s relationship with your record keeper of choice and the ability to leverage the relationship will directly affect the quality of service and access you receive from the record keeper.

Look at participant education carefully. With financial wellness taking a front row and proving to be a crucial part of plan success, a firm’s ability to meet your participants’ needs depends on the demographics of your participants as well as the firm’s resources. For example, if you’re in an industry that has multiple locations and multiple segments of employee population, is the advisor available during various shifts? Are they able to record presentations and deliver them digitally? Can they provide you with custom intranet materials? Do they make themselves available for one-on-one phone or in-person meetings?

Ask about cyber security! Advisor firms, much like any business, vary in their ability to protect your information. Cyber security is in the news because so much data is being consistently compromised. Is the advisor firm part of a larger company with an advanced IT team and cyber security protection? Is it a single-office small operation? If so, how is information being stored, accessed and protected?

Look for value-adds! It is good practice to ask for copies of publications, examples of customized education materials, links to education webinars, of meeting announcements, reports. Anyone can talk the talk, but does this advisor walk the walk? Are the things they are saying they can provide to you in existence and being used in their service model?

Reputation is everything. Don’t be afraid to question a firm’s audit record, to ask whether there have been lawsuits or fines, or any kind of discipline. Ask for thought leadership initiatives: how does the firm contribute to the community? Are they isolated or part of wider networks that allow them access to more tools and resources that will filter down to you once you’re a client? What are their memberships? What awards and recognitions have they received?

Give the responding firm a chance to ask follow-up questions, via phone or a spreadsheet. They will be better able to inform you and get more specific if they are able to clarify certain points about your business.

Finally, look for the brand. Does the service model of the advisor LOOK unique? Advisors with strong brands have a presence in the industry and have stronger resources and those resources are made available to you once you are a client.

Have questions? Need a template to start on your advisor RFP? We are happy to help!


 Securities and Retirement Plan Consulting Program advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. Other advisory services offered through Oswald Financial, a separate entity from LPL Financial.

 This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice.

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