Client Service

Recordkeeper RFP Case Study Suggests New Strategies

J.P. Morgan researchers offer an advanced look at a case study analysis suggesting a new approach to conducting adviser-supported recordkeeping RFPs. 

By John Manganaro editors@strategic-i.com | August 28, 2017
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Researchers with J.P. Morgan Asset Management recently sat down with PLANADVISER to offer an early view of an interesting new case study, “Reverse the Search.”

The release of the research coincides with the publication of PLANADVISER’s own 2017 Recordkeeping Services Guide, and taking the two together offers some important food for thought for plan sponsor clients entering the request-for-proposal process. Our analysis shows recordkeeping remains a challenging and highly competitive business, as exemplified by the shrinking number of providers participating in the annual PLANSPONSOR Recordkeeping Survey and accompanying PLANADVISER Recordkeeping Services Guide. Brian O’Keefe, director of research and surveys at Strategic Insight, parent of PLANADVISER, says, “Recordkeeping is often described as a commodity, and that might be true for the administration of participant accounts, but the 55 providers responding to this year’s survey showcase a wide range of investment, technology and servicing options.”

Besides helping people accumulate and manage savings, recordkeepers now need to work with Baby Boomer participants trying to plan how best to manage those savings. While plan sponsors are waiting on a safe harbor for lifetime income products from the Department of Labor (DOL), recordkeepers are already proving that they are willing to create the necessary capabilities to support them.

With so much ongoing evolution in the marketplace, Charlie Cote, head of Retirement Link Sales at J.P. Morgan Asset Management, says the time has come to rethink the “conventional approach” to recordkeeper searches, which separates the effort into two phases: “First, choose the recordkeeper. Then, choose a QDIA solution.” As laid out in the J.P. Morgan research, an alternative that may be better suited for today and tomorrow’s recordkeeping/investing market is to “reverse the order of the search.”

“By that we mean selecting the TDF provider first and the most appropriate recordkeeper second,” Cote says. “A different order doesn’t have to change the essential element of any retirement plan search. Defined contribution (DC) plan advisers who act as fiduciaries must follow a prudent process when helping plan sponsors. Their objective is to help clients choose a strong plan that meets their unique goals.”

NEXT: TDF dominance informs recordkeeper search