Cost Transparency: How Retirement Providers are Transforming their Business
In the current marketplace, retirement service providers are scrambling to meet regulatory requirements while trying to remain relevant and maintain their value proposition. This is due to fees evaluation in today’s cost conscious economic environment; introduction of Form 5500 Schedule C fee reporting and ERISA §408(b)(2) fee transparency requirements; and competitive marketplace. Responding effectively to this three-fold pressure from customers, regulators and competitors the service providers should understand the costs, the corresponding cost drivers to deliver a particular service and how much of the provider’s resources are consumed by each customer. This will equip them to anticipate any changes in the cost structure with changing market environment, reveal opportunities to fine tune product and service offerings and how to segment the offerings.
The paper from Deloitte LLP, Cost transparency: How retirement providers are transforming their business, explores the drivers of cost transparency and the value of undertaking the effort to analyze and understand costs. It focuses on the insights from providers who have chosen the path and considerations for making their own cost transparency effort more efficient and fruitful. The report discusses in detail:
- The journey toward cost transparency
- Steps to put together an effective cost transparency
- Keys to an effective cost transparency effort
Leading retirement service providers are already taking action through “cost transparency” efforts to make better decisions on how to serve the clients more effectively, better price their services, determine where they should spend their investment dollars and hold value-based discussions with their clients. For this to happen it is vital to use the information obtained through cost transparency to change behaviors from “do whatever the client asks“ to “let’s find an approach that meets the client needs and is cost effective” and explain the economics of the business to the related people.
Download the report to understand how cost transparency may be a differentiator in this competitive marketplace and guide the providers in offering products and services that are both desirable for clients and profitable for the business.
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