Standing Out from the Herd

Advisers generally have their favorite recordkeeping providers, choosing to work with a select handful of them. Between keeping up with what providers—whether major recordkeeping firms or third-party administrators (TPAs)—are still playing in which market(s), and who is offering what services, keeping it all straight can be a full-time job. 

Retirement plan advisers play an integral role in many providers’ delivery systems but, while some providers do both adviser-sold and direct-sold business, others do no business through intermediaries. To help advisers get a better sense of this distribution landscape, as part of sister publication PLANSPONSOR’s 12th annual Recordkeeping Survey, retirement plan recordkeepers were asked about their business delivery model. PLANSPONSOR received 79 complete responses this year from the nation’s leading recordkeepers. From that total, 56 respondents answered questions about doing business with or through intermediaries, and those recordkeepers have been included in the chart on the following pages. 

PLANSPONSOR’s annual Recordkeeping Survey shows most advisers have a variety of provider options to bring to clients. Only a handful of recordkeepers say they work solely with their own advisers, while the rest of the respondents were split evenly between those that work solely with independent advisers (defined in the survey as those outside the recordkeeping firm) and those that work with both groups. 

Recordkeepers also offer advisers a wide array of resources and support services. Of the 52 recordkeepers that reported what types of support services they offer to advisers, the most common offerings were education and enrollment support and legislative updates (92% each), followed by investment performance or benchmarking reports (88%). 

Additionally, advisers can receive help with plan design from 87% of recordkeepers. Sixty-five percent of recordkeepers provide advisers with DC plan benchmarking, but only 37% have provider search resources or tools.  When working with investments, advisers can get help with investment policy statements from 83% of recordkeepers and in the area of investment-monitoring products from about three-fourths of recordkeepers. 

Advisers looking for help building their business or expertise have options as well. Although 87% of recordkeepers said they offer training specific to defined contribution (DC) plans and 58% host conferences, only 29% sponsor designations specific to DC plans. Additionally, 60% said they can provide DC plan lead generation. 

When it comes to the all-important issue of compensation, a majority of recordkeepers said they offer RIA fees/hard-dollar fees and ongoing trails or commissions. Upfront commissions (a front-end load) and finders fees were the least popular adviser compensation options, cited by approximately half of companies.

 Note: The Recordkeeping Survey that accompanies the article above will be available shortly. In the meantime, a pdf version may be viewed HERE.