Running a vendor search, step by step
A vendor search is not a commitment to switch. It is a way to find out whether the services and fees you have are competitive, and to show how the committee reached its decision, whichever way it goes.
1. Decide why now. Common triggers are a contract renewal, service problems, fee concerns, an ownership change at the provider, or simply the passage of time. Many committees also run a periodic market check even when nothing is wrong. Write down the reason, because it is the first line of the record.
2. Set criteria and weights before you see proposals. Agree as a committee what matters: service model, technology, participant experience, fees, investment platform flexibility, payroll integration. Then assign weights. Doing this first keeps the evaluation about the plan's needs rather than about whichever presentation was most polished.
3. Gather the plan's data once. Assets, participant counts and demographics, current services and fees, payroll setup, and any special features such as loans or managed accounts. Every candidate receives the same information.
4. Issue the RFP. Choose a reasonable number of providers that fit a plan of your size. Send the same questionnaire to each, under a confidentiality agreement where appropriate, with a fixed timeline and a single point of contact for questions, so every provider hears the same answers.
5. Compare fees like for like. Ask each provider for total cost: per-participant fees, asset-based fees, revenue sharing, and charges for loans, distributions or managed accounts, along with what is included. Convert the proposals to one basis so the numbers can actually be compared.
6. Score independently, then discuss. Each committee member scores each provider on the agreed criteria before the group meets. Average the scores, then spend the meeting on the places where members disagree.
7. Choose finalists and hear them present. Three finalists is a common number. Ask each the same questions, check references, and review their control reports.
8. Decide, negotiate and document. Select the provider, and use the results in negotiation, including with the incumbent if you are keeping them. Record the criteria and weights, the scores, the reasons for the decision and how members voted.
9. Plan the transition. If the plan is moving, set the timeline, any blackout period and the participant communications before the contract is signed.
Perseptiv runs this process end to end for the committee, from requirements to a documented decision, so the search is consistent and the record is complete.
Talk to us about your plan.
General information, not legal or investment advice.