John Hancock Financial Network's 2011 Retirement Plan Advisor Survey Suggests Advisors Need New Level of Support from Broker-Dealers

BOSTON, June 30, 2011 /PRNewswire/ -- Eighty-five percent of retirement plan advisors are currently performing services traditionally performed by plan fiduciaries, although most are not declared plan fiduciaries, according to a national industry survey(1) of external retirement plan advisors conducted for John Hancock Financial Network (JHFN) by Pulse Logic. In fact, only 34 percent of respondents said they held the AIF designation.  

"A significant number of advisors are performing services that have been traditionally performed by plan fiduciaries. The number of advisors in this situation is much greater than those who actually are declared plan fiduciaries. The difference in these numbers reflects the pressure plan sponsors are exerting on advisors to bear some of their fiduciary responsibility," said Bruce Harrington, head of retirement sales and strategy, John Hancock Financial Network. "With upcoming regulation requiring more transparency, JHFN sees an opportunity for broker-dealers to provide support in order to enable advisors to become experts if they choose to specialize."

Of the survey's 220 retirement plan advisor respondents, 44 percent were affiliated with wire houses, 21 percent were independent, 20 percent were with regional broker-dealers, and 15 percent with insurance broker-dealers. When asked to characterize their approach to the retirement plan business, 18 percent said they were plan design/ERISA experts, 31 percent considered themselves investment experts and a slight majority (51%) felt they had a general sales approach to the business.

A Move to More Fee-Based Business

Eighty-six percent of the plan design/ERISA experts regard new fee disclosure regulations as an opportunity for future business growth. Greater fee disclosure and increased demands by plan sponsors, including accountability, as well as tying fees to services provided, are driving advisors to shift to more fee-based business in the future.

Further, while advisors reported that 31 percent of their current business is fee-based, in the future, they expect that number to double to 60 percent.

"The anticipated increase in fee-based business is also understandable given the impending regulatory changes, increased complexities, and pressures from plan sponsors. A shift in that direction will also require additional fiduciary support from a broker-dealer," said Harrington.

Fiduciary Guidance from Broker-Dealers

When asked what they most wanted from their broker-dealers, the advisors cited the following as their top three needs:

• Fiduciary guidance (82%)
• Competitive information (76%)
• Regulatory updates (75%)

"Not surprisingly, what advisors want most is help with the changing landscape," said Harrington. "We think that those who understand the changes and train to become specialists will find quite a bit of opportunity. For that reason we've created the John Hancock Financial Network Defined Contribution Consulting Program for our advisors."

Harrington explained that the program offers resources for advisors with differing levels of experience including training, practice management consulting, a dedicated retirement sales support team, and in-depth expert resources for those interested in becoming plan fiduciaries.

"It is a very interesting time to be a retirement plan advisor," said Kenneth Cochrane, managing director of Pulse Logic, a leading provider of market research in this field. "Our research, including this study, shows that it is an evolving marketplace as advisors redefine themselves to meet the changing needs of their clients and look to find ways to be more competitive."

Additional Points of Interest

In addition to what they wanted from their broker-dealers, respondents were asked their thoughts on how product providers demonstrated their commitment to the qualified plan business, and what attributes were most important to them in an external wholesaler.

Respondents felt that a top-tier product provider displays the following attributes:

• High quality personnel (80%)
• A strong brand (76%)
• Competitive products (70%)
• Readily available sales support (69%)
• Investment in technology and the business in general (66%)
• Established client service program with results (66%)

Retirement plan advisors' preferred ways of receiving sales support are: through a single point of contact available by phone/e-mail (49%), a support team (43%), and external product managers or wholesalers (34%).

Respondents also expressed views on the most important attributes of external wholesalers ranking them in the following order:

• Integrity (81%)
• Product knowledge (68%)
• Knowledge of competitors (62%)
• An interest in helping me grow my business (60%)
• Industry knowledge (53%)

Their top-three preferred methods of receiving product and industry updates were: in-person meeting with external wholesaler (54%), e-mail newsletters (43%), and through conference calls (37%).

About John Hancock Financial Network

John Hancock Financial Network is a national network of independent firms with approximately 1,900 financial professionals across the U.S. A leader with the stability and scale to offer an innovative business model, John Hancock Financial Network gives entrepreneurial financial professionals the power to effectively build unique businesses, based on their own vision and market opportunity. For more information on John Hancock Financial Network and its national network of independent firms, visit https://www.johnhancockfinancialnetwork.com.

About John Hancock Financial and Manulife Financial

John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. For more than 120 years, clients have looked to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Funds under management by Manulife Financial and its subsidiaries were Cdn$478 billion (US$492 billion) as at March 31, 2011. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.

The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including life insurance, fixed and variable annuities, fixed products, mutual funds, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at www.johnhancock.com.

Securities and Investment Advisory Services offered through Signator Investors, Inc., Member FINRA, SIPC, a Registered Investment Advisor, 197 Clarendon Street, Boston, MA 02116.

(1) The results of this survey may not be representative of all the retirement plan advisors meeting the same criteria as those surveyed for this poll.

SOURCE John Hancock Financial Network

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