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Simulation Tool Optimizes DC Recordkeepers’ Chances of Being Selected by Large Plan Sponsors

A recently released study and online simulator, by Boston Research Technologies (BRT), reveals the weights large plan sponsors place on a wide variety of factors when selecting recordkeepers.  Using the quantitatively-derived weights and the accompanying simulator, recordkeepers can determine which one, of the various ways they could position themselves in specific sales contests has the highest probability of success.  It also takes win-loss research in a new direction, from simply being “after-the-fact” feedback to a precise identification of how specific factors contributed to the sales outcome.  The model breaks down the decision into three phases:

  • Who gets an RFP?
  • Who makes it to the finals?
  • Who wins the new relationship?

Getting the RFP

In this phase, being the incumbent certainly helps, but we see that it is a fairly weak factor in the ultimate selection.  The same goes for the consultant’s recommendation.  That is, the recommendation is very powerful in deciding who gets an RFP, but it is a relatively weak factor in the final decision.  This is in large part due to the common practice of consultants presenting a shortlist of recordkeepers who “are capable of doing the job” but not citing the most suitable recordkeeper.  But even if they do, the relative impact on the ultimate decision is dwarfed by other factors as depicted in the study.  It also appears that being a thought leader contributes largely to getting an RFP but plays a much weaker role in the actual selection of the winner.

Making it to the Finals

In this phase of the sales process, product and pricing reign supreme.  Having state of the art recordkeeping technology and education proven effective in changing participants’ behaviors, yield the greatest advantages in making it to the finals.  The study places the weight of these factors into direct context with a variety of other factors often emphasized in the sales process.  Furthermore, the study specifies the trade-offs plan sponsors are willing to make between price, service and product quality.  The impact of the proposed cost of asset management and per participant fees is as powerful as some other big factors in the finalist selection process.  The model shows that being above the average cost of the recordkeepers in the competition has a stronger negative effect on the chances of making it to the finals than being below the average cost by an equal proportion.  Essentially, the pricing model proves the tenant that losses (i.e., higher than average prices) have a greater psychological effect than gains (i.e, below average prices).  The model specifically shows that plan sponsors will pay a higher price for better products and services to some degree.  But there are real limits.  Armed with this information, recordkeepers are better able to assess their pricing and product development strategy.  Knowing these price/product/service trade-offs allows fine-tuning of the proposal, providing a significant boost to a recordkeeper’s chances of getting a ticket to the finals.

Winning the Contest

Having earned the right to go to the finals based on acceptable product, service and pricing, It is sales brinksmanship that wins the overall prize. Willingness to be a co-fiduciary, attentiveness to needs, showing partnering skills during the sales process are some of the examples of factors that the model shows rising to the top of sales “best practices”.  Excellence in these can offset higher prices as the model shows plan sponsors are “overall-value optimizers” as opposed to “price minimizers”.


The study and the resulting simulator has proven to realistically show the relative trade-offs that large plan sponsors are willing to make in recordkeeper selection.  The model also shows that it requires being effective across a variety of factors – product, pricing, partnering and salesmanship – to be successful. Rarely do we see that a “perfect recordkeeper” emerges in the selection process.  Everything is a trade-off.  The simulator details how to offset weaknesses by emphasizing strengths.  You can find more on this study at www.bostonrt.com/reports