Research

DATA & RESEARCH | PLANADVISER December 2013

2013 Practice Benchmarking Survey

2013 PLANADVISER Practice Benchmarking Survey: Evaluating your peer group to benchmark your practice

By PLANSPONSOR staff See Archive >
2013 Practice Benchmarking Survey

The 2013 PLANADVISER Practice Benchmarking Survey (previously known as the PLANADVISER Adviser Experience Survey) sheds important light on how retirement plan advisers run their businesses—and the value they strive to bring to their plan sponsor clients and participants.

Interestingly, following the 403(b)(2) fee disclosure requirement in 2012, the biggest change in advisers’ concerns about their practices involved profitability and fee compression. In this year’s survey, 6.4% of advisers said they were worried about profitability—a 57.5% increase from the 4.1% who shared this concern in 2012, and 9.8% noted concern about fee compression—a 29.0% bump from 7.6% in 2012.

Since the Department of Labor (DOL) postponed its decision on a new definition of “fiduciary,” there has been a significant drop in the number of advisers for whom compliance and fiduciary issues are top of mind; this statistic declined by 31.1% this year, to 6.3%, down from 9.2% in 2012. Also, advisers’ faith in the strength of the economy seems to be improving, as only 2.9% called the overall economy a concern, a 53.0% decline from 6.1% in 2012.

After many years of advisers breaking from national, full-service wirehouses to go independent, this year survey respondents showed a slight reversal of that trend: The largest portion of advisers (24.2%) are affiliated with independent broker/dealers (B/Ds), down from the 26.0% who had that affiliation in 2012. The next most prevalent affiliation is as a registered investment adviser (RIA)—the case for 23.1%—up from 19.7% in 2012. Next, 19.1% are dually registered as both an RIA and B/D, up from 17.2% in 2012. Thus, almost half (42.2%) have chosen the RIA model and operate in some sort of fee-only capacity.