2012
PLANADVISER Adviser Experience Survey

Story

Story

Andrew Bannecker
Research: The PLANADVISER Adviser Experience Survey gives advisers a detailed and transparent window into how their practices, strategies and structures stack up against those of their peers—equipping plan advisers with the insights needed to examine policies, make improvements and stay ahead of competitors.
Methodology: In July, approximately 9,800 PLANADVISER magazine subscribers were asked to respond to a 56-question survey, developed by the PLANADVISER editorial and research teams. From that, 602 responses were received from qualified plan advisers. The questions included in the survey pertained to the size and scope of the advisers' qualified plan business, practice management, compensation, client services and assessments of defined contribution (DC) providers and investment managers. The provider assessment results were published in the September/October issue of PLANADVISER.

Respondent Profile

Total assets under advisement

  2011 2012
Average $630.2 million $8.28 billion
Median $100.0 million $200.0 million

Adviser firm affiliation

  2011 2012 change
National full-service wirehouse 17.7% 15.1% -14.8%
Independent broker/dealer (B/D) 26.4% 26.0% -1.7%
Regional broker/dealer 5.2% 3.2% -37.6%
Insurance or bank broker/dealer 9.9% 8.2% -17.1%
Registered investment adviser (RIA) 18.8% 19.7% 4.6%
Dually registered (RIA and B/D) 15.1% 17.2% 13.7%
Other 7.0% 10.7% 52.7%

Total retirement plan assets under advisement

  2012
Average $3.61 billion
Median $130.0 million

Number of qualified plan clients

  2011 2012 change
Less than 10 16.6% 17.1% 2.9%
10 to 20 19.1% 17.5% -8.4%
21 to 40 17.3% 19.7% 14.1%
41 to 60 17.0% 14.4% -15.2%
61 to 75 5.1% 7.1% 39.1%
More than 75 24.9% 24.2% -2.9%

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue

Practice Structure

Your practice is

An individual adviser practice 20.7%
A team practice (in one office location) 49.3%
A team practice (spread in multiple office locations) 29.8%

Do you serve as broker of record on retirement plans?

Yes 52.8%
No 27.9%
Sometimes 19.4%

Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?

Yes 78.5%
No 21.5%

Do you have a written business plan that governs your practice?

  2011 2012 change
Yes 63.9% 58.4% -8.6%
No 36.1% 41.6% 15.2%

Are you a fiduciary to clients' plans?

  2011 2012 change
Yes 47.5% 26.4% -44.5%
Yes — 3(21) 43.0% 57.4% 33.5%
Yes — 3(38) 17.2% 19.7% 14.6%
No 27.5% 27.6% 0.3%

Are you a fiduciary to plan participants?

  2011 2012 change
Yes 34.2% 34.0% -0.6%
No 65.8% 66.0% 0.3%

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue

Broker/Dealers and Custodians

Primary benefits received from broker/dealer

  2011 2012 change
Compliance oversight 71.4% 62.6% -12.3%
Investment due diligence 44.4% 28.9% -34.9%
Brand name recognition 38.3% 28.6% -25.2%
Marketing support 28.2% 22.3% -20.8%
Co-fiduciary support 30.5% 20.4% -33.2%
Other 16.5% 19.2% 16.2%
Lead generation 8.6% 4.1% -52.0%

Most common broker/dealers

  % OF ADVISERS USING
LPL 12.1%
Merrill Lynch 6.3%
UBS Financial Services 5.3%
NFP 4.0%
Morgan Stanley Smith Barney 3.5%
Financial Telesis Inc. 3.3%
Raymond James 3.3%
Financial Network (Cetera) 2.5%
Commonwealth 2.3%
Wells Fargo Advisors (First Clearing LLC) 2.3%
AXA Advisors 2.0%
Royal Alliance 1.5%

How do you feel about your broker/dealer?

  2011 2012 change
Love it 27.2% 24.9% -8.9%
Like it 39.9% 39.4% -1.2%
Don't like it, but no plans to move 5.9% 7.9% 33.6%
Don't like it, and plan to move 2.6% 3.9% 51.6%
No real feeling about it 14.4% 15.5% 7.8%
No basis of comparison 10.0% 8.4% -16.3%

Most common custodians for RIAs

  % of RIAs using
Schwab 25.5%
Fidelity/NFS 18.1%
TD Ameritrade 12.8%
Pershing 12.1%
LPL 7.4%

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue

Marketing and Service Models

On average, how often do you communicate/meet with plan participants in the following ways?

  Monthly Quarterly SemiAnnually Annually As Needed
In-person group meetings 2.2% 16.1% 30.6% 28.8% 22.3%
In-person individual meetings 2.0% 14.6% 18.5% 21.3% 43.7%
Via email 14.8% 18.2% 4.0% 1.4% 61.5%
Via webcasts 2.9% 9.6% 6.1% 4.2% 77.2%
Other electronic method 5.3% 6.7% 1.8% 2.8% 83.3%

How often do you meet with plan sponsors to discuss the following?

  Quarterly Semi- Annually Annually 1–3 Years 3–5 Years As Needed
Investments 55.6% 21.7% 17.6% 0% 0% 5.1%
Plan design/compliance 14.9% 16.4% 55.6% 3.3% 0% 9.7%
Recordkeeper/TPA selection 13.3% 12.3% 48.8% 7.2% 3.3% 15.1%

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue

Marketing and Service Models

Where do you find most of your new clients?

  2011 2012 change
Advertising (newspaper, TV, online, etc.) 0.0% 0.3% n/a
Cold calling 4.5% 7.1% 56.7%
Direct mail 0.0% 0.3% n/a
Email marketing/newsletters 1.0% 1.5% 51.1%
Referrals from existing clients 23.7% 23.2% -2.2%
Referrals from other professionals/strategic relationships 57.1% 59.7% 4.5%
Search engine optimization (SEO) 0.0% 0.3% n/a
Seminars 4.5% 2.0% -55.2%
Social media (Twitter, Facebook, LinkedIn, etc.) 0.5% 0.3% -49.6%
Webinars 0.0% 0.3% n/a
Other 8.6% 5.3% -38.5%

Plan services offered as part of retainer or annual service

  2011 2012 change
Attendance at investment/retirement plan committee meetings 97.5% 92.6% -5.0%
Ongoing investment monitoring 99.5% 89.6% -10.0%
Investment policy statement design 97.4% 88.5% -9.1%
Manager search/fund replacements 98.4% 88.3% -10.3%
Fiduciary and fund governance 96.6% 81.7% -15.4%
Provider fee analysis 93.0% 78.6% -15.5%
Enrollment meetings 93.5% 78.4% -16.2%
Benchmarking DC plan provider 89.6% 76.8% -14.2%
Written service contract/svc guarantee 96.2% 76.8% -20.1%
DC plan design 92.7% 76.3% -17.7%
Compliance reviews 94.0% 76.1% -19.1%
Employee group meetings, ongoing 93.9% 76.1% -19.0%
Vendor/fee review or benchmark study 84.9% 71.8% -15.5%
Communication policy stmt design 93.8% 69.5% -25.9%
Asset allocation models 87.5% 69.0% -21.2%
Employee meetings, one-on-one 88.5% 66.2% -25.2%
Vendor search/Request for proposal 72.8% 62.3% -14.4%
Individual participant inv advice 82.0% 48.6% -40.7%
Nonqualified plan design 58.9% 40.7% -30.9%
Defined benefit (DB) plan design 68.1% 37.7% -44.7%
Private wealth/HCE services 54.6% 25.2% -53.9%

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue

Fees/Revenue

Average annual charge for services to retirement plans, by plan size

  $1MM $5MM $20MM $50MM
Less than 1 bp 3.6% 3.5% 3.1% 4.3%
1 to 5 bps 2.1% 1.7% 2.4% 9.1%
6 to 10 bps 0.3% 1.2% 10.6% 34.6%
11 to 25 bps 9.9% 33.3% 67.8% 45.9%
26 to 50 bps 35.8% 43.8% 11.6% 4.8%
51 to 75 bps 24.5% 9.6% 3.1% 0.4%
76 to 100 bps 16.4% 6.1% 1.4% 0.4%
More than 100 bps 7.5% 0.9% 0.0% 0.4%

How fees are disclosed to plan sponsor clients

  2011 2012 change
Annual review 71.6% 70.2% -1.9%
Contract 66.7% 64.6% -3.1%
Fee disclosure statement 60.1% 75.9% 26.2%
Form ADV 33.7% 40.0% 18.7%
Request for proposal (RFP) 49.4% 24.9% -49.6%
Other 5.8% 5.6% -3.3%

How advisers are paid for qualified plan business

  2011 2012 change
Commissions/12b-1s 62.4% 55.8% -10.6%
Fees based on assets 77.6% 73.3% -5.6%
Hard-dollar or flat fee* 47.1% 51.1% 8.4%
Per participant 9.4% 9.9% 5.6%
Per project 27.5% 24.8% -9.7%
ERISA budget/ERISA reimbursable 25.9% 30.7% 18.7%
Other 1.2% 2.4% 97.0%

Average division of revenue

  2011 2012 change
Broker/dealer 52.9% 20.7% -60.9%
Adviser salary 51.7% 34.8% -32.7%
Partner salary 26.4% 8.6% -67.3%
Staff salaries 11.5% 12.7% 10.5%
Travel expenses 13.6% 3.9% -71.3%
General expenses 18.9% 14.5% -23.5%
Other n/a 4.9% n/a

Table of Contents

Click to jump to section

Respondent Profile

  • Total assets under advisement
  • Adviser firm affiliation
  • Total retirement plan assets under advisement
  • Number of qualified plan clients

Practice Structure

  • Your practice is
  • Do you serve as broker of record on retirement plans?
  • Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
  • Do you have a written business plan that governs your practice?
  • Are you a fiduciary to clients' plans?
  • Are you a fiduciary to plan participants?

Broker/Dealers and Custodians

  • Primary benefits received from broker/dealer
  • Most common broker/dealers
  • How do you feel about your broker/dealer?
  • Most common custodians for RIAs

Marketing and Service Models

  • On average, how often do you communicate/meet with plan participants in the following ways?
  • How often do you meet with plan sponsors to discuss the following?

Marketing and Service Models

  • Where do you find most of your new clients?
  • Plan services offered as part of retainer or annual service

Fees/Revenue

  • Average annual charge for services to retirement plans, by plan size
  • How fees are disclosed to plan sponsor clients
  • How advisers are paid for qualified plan business
  • Average division of revenue