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Advisers trim down list of recommended providers

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According to the latest Cogent Reports study from Market Strategies International, financial advisers have trimmed down their set of recommended plan providers.

According to the study, “Retirement Plan Advisor Trends,” advisors are recommending an average of just 2.2 plan platform providers to prospective clients. 39% of these advisers recommend only one plan provider for clients to consider.

As a third party administrator (TPA), that’s a hard competition to deal with, but it shows how important it is to bridge relationships with financial advisors since the often serve as the gateway to plan sponsor clients. It’s one of the reason I started writing articles that could help financial advisors get new clients.

As far as the numbers go, what’s alarming to me is that 39% of advisors who only recommend one provider. In my opinion, it’s a potential disaster for an advisor to recommend only one provider. I always think 2-3 recommendations is better because it allows the plan sponsor choice and it also gives cover to the final advisor if the provider that gets hired does a bad job. It’s a lot harder to get cover when there is only one provider recommended and the adviser made the recommendation.

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