My Unique PlaceDefining and communicating your value to plan sponsors

It is often said that if you do not articulate your own position, your competitors will do it for you. That’s why it’s so important to carefully prepare your own unique story, incorporating the value you bring to your plan sponsor relationships.

Using the tips and tools included here, you can craft a unique story to ensure that you stand out from the crowd in the defined contribution (DC) market.

Welcome to My Unique Place

My Unique Place 3

Table of Contents

Section 1 My Experience 4

Section 2 My Business Model and Branding 5

Section 3 My Competitive Offering 6

Section 4 My Unique Story 8

Section 5 My Statement of Services 13

4 My Unique Place

SECTION 1

My Experience

Success in the DC retirement plan business begins with experience.

Take a close look at the experiences that have honed your relationship-building skills. Those experiences don’t have to be confined to the retirement plan business. If you’ve built strong relationships in other industries, you are well on your way to growing your DC retirement plan business.

List your relationship-building experiences before becoming a financial advisor (e.g., worked as a trust officer of a bank, served on the board of directors of the Southeastern Ohio Water District, or was a program chairperson for the Brown County Job Network Association).

Now list your relationship-building experiences after becoming a financial advisor.

Which one or two experiences are most likely to influence your ability to expand your DC plan business? In other words, do you have experience in particular industries that will help you focus on related industries? Circle the one or two most important experiences from the answers you supplied to the above questions and refer to them as you construct your positioning statement later in this booklet.

5My Unique Place

SECTION 2

My Business Model and Branding

How you characterize your DC retirement plan business will depend largely on how your firm is set up to service this market.

You will need to evaluate the capabilities you can offer very carefully. You may also want to work toward adding partners, such as additional plan advisors or establishing alliances with vendors of tools and services. For example, you may want to team up with a recordkeeping organization that matches the scope of the plan clients you intend to serve.

How many DC plans do you or your firm already service, and how large are the plans?

How would you characterize these current plans? Are they within a certain industry? Are they within a certain size range?

How are your firm’s current DC retirement plan products and services branded? In other words, do your clients see the offering as a package from your firm’s parent company, from your local firm, or from you individually?

6 My Unique Place

SECTION 3

My Competitive Offering

When plan sponsors look for a DC service provider, they are making an important business decision.

First, check the boxes for all the services that you offer in your practice. Then, consider how your services may stack up against the competition.

That’s why it is crucial to have your ducks in a row. Know exactly what products and services you can provide at a competitive level and know your competition. Ask plan sponsors in your marketing territory about your competitors. Every time you lose a pitch, call the plan sponsor and ask what led to the choice.

The following table will help you determine your competitive position. The purpose of this exercise is to keep you aware of the competitive climate, in addition to providing the basis for constructing your positioning statement and elevator pitch in Section 4.

FID

UC

IAR

Y/R

EGU

LATO

RY

Product or Service Competitive Assessment

£ Provide annually updated fiduciary checklist

£ Educate sponsors about general standards of fiduciary conduct

£ Educate sponsors on the differences between investment education and advice

£ Provide guidance on defining, documenting, and disclosing fiduciary actions

£ Provide guidance on safe harbor categories of investor information and materials

£ Review current state of documentation of plan procedures and decisions

£ Facilitate review of contracts with experts and service providers

£ Facilitate training for named fiduciaries

£ Facilitate development of comprehensive plan fiduciary list

£ Development and review of Investment Policy Statement

£ Act as investment fiduciary to the plan (in cases where you are also a fiduciary)

£ Provide a compliance review (in cases where you are also a fiduciary)

My Unique Place 7

CO

MM

UN

ICAT

ION

S/EM

PLO

YEE

EDU

CAT

ION

INVE

STM

ENTS

PLA

N D

ESIG

NM

ISC

ELLA

NEO

US

Product or Service Competitive Assessment

£ Financial Wellness program search

£ Education program strategy

£ Guidance on understanding participant behavior

£ Enrollment services (group and/or individual meetings; include frequency of meetings)

£ Ongoing investment education (seminars, one-on-one meetings; include frequency of meetings)

£ Asset allocation modeling

£ Individual participant account reviews (include frequency of meetings)

£ Retirement income planning

£ Distribution option counseling

£ General financial planning

£ Special planning services for key executives

£ Investment menu selection

£ Investment monitoring

£ Investment advice services

£ Attendance at committee meetings

£ Guidance on fund replacements

£ Guidance on Qualified Default Investment Alternatives (QDIAs)

£ Guidance on investment menu compliance with ERISA section 404(c)

£ Plan design consulting

£ Ongoing review of plan performance metrics

£ Guidance on assessing the impact of plan changes on retention, costs, and testing

£ Guidance on selecting plan defaults

£ Guidance on safe harbor design options

£ Assistance with fund manager search/vendor search

£ Transition services to new recordkeeper

£ Provider fee and service reviews

£ Provider management and oversight

£ Plan setup and plan conversion services

8 My Unique Place

SECTION 4

My Unique Story

Now that you have assessed your experience and compared your capabilities with the competition, you’re ready to construct your positioning statement and elevator pitch.

Complete the checklist below, and refer to it as you develop your positioning statement.

WHAT MAKES A WINNING POSITIONING STATEMENT?A positioning statement is not a business goal—not a wish list of what you or your firm would like to be. Those items belong in a strategic business plan that maps out where your business is headed. A positioning statement is narrower in scope—a current snapshot of what you are right now or what a prospective client would think of you after evaluating your capabilities, products, and services. It is also a realistic description of how you fit into the mix of competitors providing DC services.

Checklist for Constructing an Effective Positioning Statement:

£ Does it define the scope of your primary market?

£ Does it reflect a client base that you and your firm can service effectively and profitably?

£ Does it address your products and services in terms of the plan sponsors’ major priorities and concerns?

£ Does it sound like a statement that only you and your firm could make?

£ Will the statement fit on two-thirds of a page?

£ Can the statement be embraced by other members of your team?

£ Does it answer this question for the prospect: “Why should I choose you over the other advisors available to me?”

My Unique Place 9

Examples

A poorly written positioning statement:My firm, XYZ Services, provides defined contribution plans to any size company in any industry. We can offer almost any type of plan that a plan sponsor asks for. We are profitable and expect to grow our business as the number and size of DC plans increase. When we add a plan to our roster of clients, we will hire people to serve it. We believe we are very good at what we do.

What’s wrong with this positioning statement?�� It is self-centered. It states its position in terms of how the advisor sees his or her own business, not in terms of how a prospective client might benefit from the advisor’s services.

�� It does nothing to define a specific or niche market.

�� It does not define how the products and services might be different from the competitor’s offer.

A well written positioning statement:My firm, XYZ Services, is dedicated to helping construct and implement defined contribution plans that focus on increasing employee participation. We understand the unique needs of companies in the manufacturing sector. By tailoring our investment options and services to our clients’ specific situations and needs, we help them get more value for their retirement plan expenses. We strategically partner with our clients to identify their top plan issues and offer unique, effective solutions.

What’s right with this positioning statement?�� It defines the scope of the firm’s client base in a way that builds confidence in this advisor. This is crucial since much of an advisory firm’s new business is likely to come from referrals in similar businesses or localities.

�� It is benefit oriented, as it casts the advisor’s position in terms of what a plan sponsor might look for: high employee participation, tailored investment options and services, and high employee satisfaction.

�� It is unique in that it stresses certain attributes that not just any advisor can claim and deliver.

Positioning statement uses: You can use your positioning statement as a guideline for developing sales and marketing materials. For instance, if you place an ad in an industry or area business newsletter, you can use the language (or the essence of the language) to write your ad copy. You can also use the positioning statement in materials you prepare to hand out to prospective clients or use it to introduce your services at seminars.

10 My Unique Place

SECTION 4 (CONT.)

My Unique Story

Draft your positioning statement in three steps:

STEP 1Write a statement about the scope of your marketing niche. Use information you entered for Section 1 and for the first two questions of Section 2. And remember that if you try to be all things to all people, you won’t have a distinct position and your competition may pigeonhole you in a way that you may not like.

STEP 2Write a statement about what you can achieve for your prospective clients. This should emphasize one primary deliverable, but may include a couple of secondary ones. Refer to the services you’ve rated highly relative to your main competitors in Section 3. Be specific in how you will deliver these and what they will do for your clients.

STEP 3Write a statement about how you or your firm differs from the competition. Emphasize one differentiating factor rather than listing several. This can include value-added services, superior products or services, the way you service your clients, or the values you stand for.

11My Unique Place

Together, the three statements make up the components of your positioning statement. Use this space to blend them into a complete statement.

12 My Unique Place

SECTION 4 (CONT.)

My Elevator Pitch

Like the positioning statement, your elevator pitch should sound as though it comes only from you.

To get started, highlight the key points in your positioning statement. Then choose the single most distinctive point and state it aloud using an engaging question or statement followed by your solution. For example:

Do you know that most people avoid thinking about retirement because it’s too overwhelming, so they end up not participating at all? What we do at XYZ Services is help business owners revise their plans so that employees participate more—and feel better about their jobs. In fact, we met with XX employees last year to help them better understand their 401(k)s and start contributing more.

Repeat your pitch until you feel comfortable with it and you can deliver it in 15 to 20 seconds. Then write it down in the space below. Check to see if it addresses a key concern or need of plan sponsors. If it doesn’t, edit your elevator pitch and give it another verbal test.

Elevator Pitch Tips: Tailor your elevator pitch to each prospect you meet, based on the information you know about the prospect. You may want to develop additional elevator pitches based on the secondary points you’ve highlighted in your positioning statement. This way, you will be prepared to zero in on other needs and concerns.

Here are a few techniques to consider:

�� Make your pitch personal.

�� Focus on your prospect—their needs and your solutions.

�� Consider using a story or an analogy.

�� Use a powerful fact or figure to support the benefits of your solutions.

13My Unique Place

SECTION 5

My Statement of Services

A strong Statement of Services can give you an advantage by focusing the conversation on the value you add to the plan sponsor, as opposed to simply providing a laundry list of the services you offer.

STEP 1:Define the priorities of your audience Make a list of the top priorities of your plan sponsors, taking into account the varying perspectives of different potential audiences (e.g., CEO, treasurer, HR professionals).

Base the list on your personal experience working with clients, as well as industry research and current analysis of hot topics to plan sponsors and participants.

STEP 2:Communicate your differentiated value Next, look at the services you provide and match them to sponsor priorities you have identified. Then you can begin to gather your results and develop your proof statements for each priority and list of related services. You may want to use statistics, case studies, client testimonials, or other means of substantiating your claims.

Please note, however, that not all of this information will be included in your final Statement of Services. It will instead be used to demonstrate your value at different points throughout the sales process.

Gaps and opportunities One clear benefit of working through this process is that you may start to identify gaps in your service model or clear opportunities to broaden your client base. Are you delivering excellent employee communications but still learning all there is to know about plan design? The following strategies might help bridge those gaps:

�� Seek out specialized industry conferences These can provide both the knowledge you need to expand your services in a specific area and networking opportunities.

�� Look for a mentor Is there another experienced advisor you can turn to for insight into a specific service area?

14 My Unique Place

SECTION 5 (CONT.)

My Statement of Services

EXAMPLESThe following pages provide examples of two Statements of Services—one that is poorly executed and one that takes into account everything learned in this tool set.

As you’ll see, the well-executed Statement of Services not only provides additional information about services offered and client priorities, it also clearly articulates the value that the advisor brings to the relationship.

Statement of Services

CONTACT INFORMATION

Julia Alvarez Retirement Plan Services Advisor 12 Cranbrook Drive Brookline, MA 02446

Jalvarez@alvarezadvisors.com Ph: 617-123-0123 Fax: 617-234-0234

STATEMENT OF SERVICES

Introduction: Alvarez Advisors serves a diverse group of plan sponsor clients in industries ranging from manufacturing to technology, health care, and financial services.

Among the services we provide our clients are:�� Investment policy development

�� Fund menu design

�� Investment monitoring/committee meetings

�� Fund replacements/fund manager search

�� Asset allocation modeling

�� Compliance review

�� Vendor search

�� Provider fee and service reviews

�� Provider management and oversight

�� Education program strategy

�� Employee meetings

The Poorly Executed Statement of Services.This example simply provides a list of available services with no regard for the client’s priorities and no results.

My Unique Place 15

STATEMENT OF SERVICESIntroduction: Alvarez Advisors is dedicated to helping construct and implement defined contribution plans that focus on increasing employee participation and income in retirement. We understand the unique needs of companies in the manufacturing sector. By tailoring our investment options and services to your specific needs, we help you get more value from your plan—both for your firm and your plan participants.

Client priority: Fiduciary/Regulatory Services Services in this area are designed to help clients familiarize themselves with the laws and regulations governing fiduciaries and follow the three Ds of being an effective fiduciary: define your responsibilities, document your actions, and disclose necessary details.

Selected services: �� Provide annually updated fiduciary checklist

�� Review documentation of plan procedures and decisions

�� Compliance review

Demonstrated results:�� 100% of clients compliant with all applicable Internal Revenue Code tests, including ADP, ACP, compensation ratio testing, and top-heavy testing.

�� Annual reviews ensured that plan documents for all clients were updated to reflect all new legislative provisions.

Client priority: Communication/Employee Education A top priority for many clients, services in this area focus on ensuring that sponsors communicate with their participants in ways that inspire engagement and action.

Selected services:�� Education program guidance

�� Enrollment services

�� Retirement income planning

Demonstrated results:�� More than 87% success rate enrolling eligible new employees among six new plans

�� Rolled out e-statements for all clients

�� Developed a “stay the course” education campaign designed to reassure participants of the value of maintaining equity allocations in a down market. 90% of participants who received the education campaign made no changes to their asset allocation, and 10% actually increased their deferral rates.

Statement of Services

CONTACT INFORMATION

Julia Alvarez Retirement Plan Services Advisor 12 Cranbrook Drive Brookline, MA 02446

Jalvarez@alvarezadvisors.com Ph: 617-123-0123 Fax: 617-234-0234

The Well-Executed Statement of Services.This example defines the services offered in the context of client priorities and clearly demonstrates past successes.

16 My Unique Place

SECTION 5 (CONT.)

Statement of Services Template

This template provides a starting point to create your own personalized Statement of Services. You can use the fillable template shown on the next page to guide the process and customize it with your own information.

If you have questions, please contact your plan provider who brought you this kit, or contact T. Rowe Price at 1-800-371-4613.

My Unique Place 17

Statement of Services

Fiduciary/Regulatory Services Selected services:

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Demonstrated results:

��

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Communications/Employee Education Selected services:

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��

Demonstrated results:

��

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CONTACT INFORMATION

STATEMENT OF SERVICES

My Unique Place18

Statement of Services

Investments Selected services:

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Demonstrated results:

��

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Plan Design Selected services:

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Demonstrated results:

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Other Services (optional section):

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CONTACT INFORMATION

STATEMENT OF SERVICES

My Unique Place 19

Notes

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Visit troweprice.com/dc to access institutional investment content and DC specific resources for you, your sponsor clients, and their participants.

T. Rowe Price Investment Services, Inc., distributor.