It can be said that retirement plan advisers have a
better—or at least a more comparative—perspective than their plan sponsor
clients on the relative strength of products and services offered by investment
and recordkeeping providers, not least because advisers can and usually do work
with many providers concurrently. This year’s PLANADVISER Retirement Plan
Adviser Survey, our seventh, endeavors to gain insight from the adviser
community about how providers and funds are selected, as well as which are
currently in favor.
This year’s survey, as always, will be published in two
parts. In this issue, we examine advisers’ favored investment and recordkeeping
providers. Our next issue will feature adviser practice structure and
experience, with the intention to help advisers learn from, and benchmark
against, peer experience. This year, we were fortunate to receive complete
survey responses from 629 retirement plan advisers, enabling us to present data
that is representative of the plan adviser community as a whole.
On the investment side, the criteria for fund selection have
remained stable. This year, as in 2012 and 2011, performance versus benchmarks
was the top criterion for selecting appropriate funds, and 92% of advisers
ranked performance first, second or third in 11 categories. Five-year return
was the next most important criterion (78.1% ranked this in the top three),
followed by plan fee structure (68.4%).
When asked to list their top five fund family
recommendations for plan sponsors, advisers once again chose PIMCO/Allianz as
their preferred fund family, with 50.6% of advisers listing the firm, although
this is a drop from last year’s 56.6%. Vanguard came in second at 44.2%, and
American Funds ranked third (40.3%), followed by J.P. Morgan (31.6%) and T.
Rowe Price (30.0%).