Date
03 . Nov . 15

(InHub Quoted) Advisor RFPs not Just for Mega Plans

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By: Fred Barstein, 10.30.15.  The median size of plans conducting advisor RFPs recently is $35 million, according to research by Inhub, an online advisor RFP service. Fielding Miller recently said that his group is filling out an RFP every day, some of which are under $10 million.

Though many advisors seem ambivalent about clients and prospects conducting an advisor RFP, they are eager to participate in RFPs to which they are invited. Some advisors believe that clients can fulfill their fiduciary responsibility by using a database to compare advisory fees versus an RFP; it would be interesting to see if they recommend the same approach in benchmarking a client’s record keeper.

Findings by Inhub on recent RFPs include:

  • 90% of plan sponsors had a no-call policy
  • 100% moved to an in-person finals presentation
  • 5 to 11 advisors were invited to submit, with 3 to 6 moving on to the finals
  • 80% of plans hired a new advisor
  • While the median plan was $35 million, the average was $841 million

Experienced advisors with a deep team and significant intellectual capital benefit the most by the inevitable move to advisor RFPs, further accelerating advisor consolidation. Just as record keepers resisted and resented advisors conducting RFPs 10 years ago but eventually accepted the benefit to them and clients, advisors should see the benefit of advisor RFPs, even for current clients.

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