Tag Archives: Bryan Sklar

Is there a fee for this?

Let’s face it, project fee discussions are never fun. But they are a critical part of doing business, both from a retirement plan management perspective and in building a strong overall partnership between you and your vendors. A consistent approach to fee discussions can build credibility on both sides now and in the future as needed projects arise.

The first key ingredient to a fee discussion or proposal is transparency. Being open and direct about fees helps to avoid the negative perception that can arise with surprises and confusion about why a fee is being charged or how much a request will actually cost. Removing uncertainty and proactively addressing fee questions will be an important step in building trust between you and your vendors. Your vendor should communicate early and often, allowing ample time for discussion, proposal review, and follow-up questions.

The second key ingredient is making sure your vendor is communicating with the proper stakeholders within your organization. Your vendors often work with many different contacts within your organization, and ensuring that the key decision makers are not only in the loop but are the appropriate contacts will prevent vendors discussing the proposal with multiple partners before getting to the right person who can provide approvals for the work—that person may not always be you.

The third key ingredient is for your vendor to work closely with its own internal business partners to ensure that what is being proposed is appropriate from an effort perspective, and that a high-quality product is delivered to satisfy the specific need. Chances are, your vendor contact may not be the expert in all the necessary detail needed for a successful effort. It’s important for vendor contacts to properly coordinate with their own internal resources to obtain what is needed to estimate the work and associated costs. This will go a long way toward efficiently getting the work done at the right cost.

A structured proposal should always be provided regardless of the nature of the project on the table. The proposal should be clear and concise, getting to the point quickly on what is to be delivered and the costs around it. A similar approach and structure each time allows you as the client to know what is coming, and to build a level of comfort with your vendor to avoid confusion and uncertainty. The main topics covered in a structured proposal should always include: what is being asked, what is being delivered, and a clear overview of the cost (hours worked, cost per hour, or cost per work item). Finally, it is equally critical to state what is not being covered by a proposal. This helps to set the scope and boundaries around the work product, protecting both you and your vendor from surprises during the course of the work.

Even with a smooth start to a fee discussion, things can go wrong. The scope of the project can change or timelines may require modification. In these cases, it is critical for your vendor to keep you informed through frequent and scheduled updates. This should be done at every stage of the project, allowing you and your internal business partners to digest and respond in a timely fashion as changes come up.

The positive Impact of consistently following this approach accomplishes several important goals. First, it ensures all parties will be clear about the scope of the work and the cost. Second, the credibility built through developing a structured process reduces future work and questions surrounding projects and proposals. Clearly said, you know what is coming, you understand the approach, you have the relevant details, and you can mitigate time spent asking questions around costs and the services to be delivered. Finally, and perhaps most importantly, this goes a long way in building confidence in your business partners and believing that they can be trusted to deliver fair fees and a high-quality work product.

Relationship managers are trusted partners

In working with your retirement plan vendors, the relationship manager (RM) is someone you work closely with on a regular basis for a number of years. This being the case, establishing, cultivating, and managing this relationship is imperative. Beyond the basic mechanics of being your RM, taking that role to the next level and truly being a trusted partner for your organization can be a challenge. Let’s explore the topic.

We are going to look at three key areas in building and maintaining these relationships—being a business partner, a problem solver, and an advocate for your organization. That all seems very straightforward, but what does it mean tactically on the ground each day?

Being a strong business partner requires your RM to know the culture of your organization, your history, your business goals, and your people. It is important that they know you, and not just at the basic level of work product or service interaction, but understanding how you fit into the organization as well as your individual and corporate goals. The interaction with you should be frequent, and often in smaller one-on-one settings. This usually allows a more open and frank discussion with your RM without the pitfalls of a larger group discussion with multiple objectives and perspectives to work through. At a broader level, your RM wants to understand your organization’s culture, internal structure, and how your various business units interact with each other. This helps RMs have a better understanding of not only the organizational goals, but also of how they can work to help you achieve them. Understanding your future starts with understanding your history, prior success, prior challenges, and prior needs. Having an in-depth understanding of these components, together, will better equip your RM to work closely with you to develop and execute a strategy for the future. At a broader level, your RM wants to understand your organization’s culture, internal structure, how business units interact with each other, and your external market space.

Outside of delivering products and services, your RM wants to be a problem solver. Things go wrong and issues come up. It is important for your RM to react appropriately to those problems, recognizing and providing solutions in a timely fashion. Beyond providing the necessary technical product and service solutions, your RM can be an asset adding value in every interaction that helps you achieve your collective goals. Providing thought leadership, introducing new concepts to the current state of things, and helping you to view your retirement plan from a different perspective are important aspects in having a trusted partner. Let’s face it, bringing strong and positive solutions to the table only helps you reach your overall retirement plan goals.

An RM is a true advocate for you and your organization. An RM must wear a “client hat” and bring your message and mindset back to the internal vendor organization. Your RM explains your needs, goals, and perspectives, keeping your best interests in mind; from fair and reasonable fees to assuring that a high-quality work product is consistently delivered every day. Understanding these concepts also helps RMs deliver and prioritize information in a way that is most beneficial to you, from meaningful meeting materials to focused interactive discussions.

You work with different retirement plan vendors regularly. Assuring that you have the right RM who can be your trusted partner in business, problem solving, and as your advocate is important. From the tactical side of making your life easier on a daily basis to moving toward strategic retirement plan goals, the right trusted partner is essential.