2015
PLANADVISER Practice Benchmarking Survey

Survey Data

Survey Data

Respondent Profile

Total retirement plan assets under advisement
TotalTop ConcernGrowth Area*Avg # of Office LocationsAvg # of Advisers in practiceAvg # of support staff in practice
<$10MM2%Fee compressionFiduciary svcs1.43.97.9
$10MM – $100MM12%Practice mgtFiduciary svcs1.23.03.1
>$100MM – $200MM14%Gov't regulationFiduciary svcs2.23.54.5
>$200MM – $400MM20%Gov't regulationReferrals1.74.55.3
>$400MM – $800MM15%Fee compressionReferrals1.94.05.3
>$800MM – $1B6%CompetitionFiduciary svcs2.35.28.9
>$1B – $2B16%Fee compressionStrategic partnerships2.66.312.3
>$2B15%Fee compressionFiduciary svcs3.39.416.2
Footnote: *Besides 401(k) plans
Adviser firm affiliation
20152014CHANGE
National full-service wirehouse25%15%66%
Independent broker/dealer (B/D)17%24%-29%
Registered investment adviser (RIA)24%24%-1%
Dually registered (RIA and B/D)24%16%49%
Other9%20%-55%

Practice Structure

Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
20152014CHANGE
Yes93%84%11%
No7%16%-54%
Are you personally involved in evaluating and recommending defined contribution plan providers/recordkeepers in an advisory capacity with your qualified plan clients?
20152014CHANGE
Yes94%85%11%
No6%15%-59%
Do you have a written business plan that governs your practice?
20152014CHANGE
Yes84%61%38%
No16%39%-59%
Are you a fiduciary to plan participants?
20152014CHANGE
Yes44%34%29%
No56%66%-15%
Are you a fiduciary to clients’ plans?
20152014CHANGE
Yes, 3(16)5%3%66%
Yes, 3(21)90%29%211%
Yes, 3(38)56%27%109%
No6%24%-74%
Do you provide individual advice or wealth services to plan participants?
20152014CHANGE
Yes60%60%1%
No40%40%0%

Fees/Revenue

How fees are disclosed to plan sponsor clients
20152014CHANGE
Annual review75%66%14%
Contract76%66%15%
Fee disclosure statement68%77%-12%
Form ADV53%39%36%
Request for proposals35%22%61%
408(b)(2) disclosure statement67%n/an/a
Average division of revenue
20152014CHANGE
Broker/dealer21%19%12%
Adviser salary29%34%-16%
Partner salary10%7%37%
Staff salaries16%13%23%
Travel expenses4%3%36%
General expenses9%10%-14%
Other12%14%-15%
How advisers are paid for qualified plan business
20152014CHANGE
Commissions/12b-1 fees (variable)30%n/an/a
Commissions/12b-1 fees (flat fee)30%n/an/a
Fees based on assets88%81%9%
Hard dollar/flat fee78%51%53%
Per participant8%9%-10%
Per project37%21%76%
ERISA budget/ERISA reimbursable52%27%92%
Whether compensation varies based on products or services offered
20152014CHANGE
Yes43%42%1%
No58%58%0%
Average annual charge for services to retirement plans, by plan size (BPS = basis points)
$1MM$5MM$20MM$50MM$100MM$250MM$500MM$1B
<1 bp3%1%1%1%1%4%8%11%
1–5 bps1%1%1%3%23%44%30%17%
6–10 bps0%0%9%39%42%10%6%1%
11–25 bps4%25%78%41%11%2%1%0%
26–50 bps46%61%6%2%0%0%0%0%
51–75 bps24%6%1%0%0%0%0%0%
76–100 bps9%1%1%0%0%0%0%0%
>100 bps0%0%0%0%0%0%0%0%
Do not service this size12%6%4%14%24%39%55%70%

Broker/Dealers and Custodians

Most common custodians for RIAs
% of RIAs Using Each 2015% of RIAs Using Each 2014CHANGE
Schwab38%28%35%
LPL Financial29%22%31%
Fidelity (NFS)25%18%41%
TD Ameritrade19%18%6%
Matrix14%13%9%
Pershing, LLC10%9%14%
Wilmington Trust10%n/an/a
State Street7%n/an/a
J.P. Morgan6%n/an/a
Vanguard6%n/an/a
UBS6%n/an/a
Wells Fargo5%n/an/a
Securian4%n/an/a
NFP Securities, Inc.4%n/an/a
Prudential Financial4%n/an/a
Primary benefits received from custodians
20152014CHANGE
Trading platform49%n/an/a
Retirement specialists26%
Online access to trust reporting22%
Robust trust and trading reports19%
Plan distribution processing (to plans)14%
Trading alerts6%
Other20%
Custodian adds no value18%
Adviser ratings of their custodians
20152014CHANGE
Excellent 34%30%15%
Good 48%57%-15%
Satisfactory 17%12%39%
Poor 1%1%-31%
Most common broker/dealers
20152014CHANGE
LPL Financial27%18%49%
Morgan Stanley Smith Barney17%6%192%
UBS Financial Services7%5%63%
Merrill Lynch6%4%46%
NFP Securities, Inc.5%4%8%
Lockton Financial Advisors3%0%n/a
Raymond James Financial Svcs, Inc.2%5%-54%
Wells Fargo Advrs (First Clearing LLC)2%5%-61%
Cambridge Investment Research2%3%-39%
CapFinancial1%0%n/a
M Holdings Securities1%2%-39%
Charles Schwab1%0%n/a
Primary benefits received from broker/dealers
20152014CHANGE
Compliance oversight72%66%9%
Technology/IT support55%45%23%
Brand name recognition43%31%38%
Investment due diligence42%26%63%
Retirement plan expertise42%25%67%
Co-fiduciary support41%19%117%
Wealth management support39%28%39%
Marketing support38%25%50%
Participant education materials32%16%98%
Retirement plan search26%13%97%
Retirement income projection tools17%14%24%
Lead generation/referrals14%7%100%
B/D adds no value6%11%-48%
Adviser ratings of their broker/dealers
20152014CHANGE
Excellent 50%32%55%
Good 39%45%-14%
Satisfactory 11%18%-41%
Poor 1%5%-81%

Marketing and Service Models

Where do you find most of your new clients?
20152014CHANGE
Advertising (newspaper, TV, online, etc.)0%0%n/a
Cold calling4%8%-44%
Direct mail0%1%-100%
E-mail marketing/Newsletters2%1%100%
Referrals from existing clients22%26%-15%
Referrals from strategic relationships65%59%11%
Search engine optimization0%0%n/a
Seminars2%2%6%
Social media0%0%n/a
Webinars1%0%n/a
Which of the following success measures do you use with retirement plan clients?
20152014CHANGE
None - we do not have any formal plan success measures3%4%-20%
Employee satisfaction with plan (through survey)28%26%9%
External/competitive benchmarking of plan design69%34%104%
% of participants using advice tools/seminars offered through the plan31%22%43%
% of participants who increased deferral rates in the prior 12 months50%26%92%
% of participants with "appropriate" asset allocations (i.e., close to target-date fund glide path, etc.)57%43%32%
% participants saving to match47%42%12%
% of participants meeting income replacement ratio goals (i.e., will replace y% of income in retirement)56%48%17%
% of participants meeting projected monthly retirement income goals (i.e., $X per month in retirement)34%33%4%
Deferral rates of various employee segments75%65%15%
Participation rates82%83%-1%
Other7%n/an/a

Concerns and Expectations

What is your top concern facing your practice today?
20152014CHANGE
Adding new clients26%43%-40%
Client retention10%12%-16%
Compliance/fiduciary issues25%25%0%
Competition/practice differentiation28%26%8%
Overall economy5%7%-23%
Fee compression35%23%52%
Fee disclosure/transparency6%4%60%
Government regulation38%23%65%
Marketing17%21%-21%
Participant communication/education24%16%52%
Plan sponsor communication/education11%11%3%
Practice management28%19%45%
Profitability16%16%0%
Staffing21%15%40%
Technology12%9%37%
Succession planning7%8%-14%
In terms of the number of investment options on your DC plan client lineups, have the number of funds changed in the past year?
2015
The number of funds on DC plan lineups have increased for many/most of my DC clients11%
The number of funds on DC plan lineups have stayed the same for many/most of my DC clients61%
The number of funds on DC plan lineups have decreased for many/most of my DC clients28%
How confident are you that most of you plan sponsor clients’ employees will achieve their retirement income goals by age 65?
20152014CHANGE
Very confident4%2%108%
Confident25%13%89%
Somewhat confident42%41%2%
Only a little confident20%29%-29%
Not at all confident9%13%-34%
Unsure0%2%-85%
What do you predict will be the most significant growth area/strategy for your practice in the next 12 months?
20152014CHANGE
401(k) plans48%48%0%
403(b) plans17%13%34%
Plan/fee benchmarking19%18%5%
Defined benefit plans14%10%44%
Fee disclosure3%3%8%
Fiduciary services36%28%30%
Participant advice/education33%26%25%
Retirement income products6%18%-66%
Target-date funds6%6%8%
Referrals32%28%13%
Rollovers8%18%-56%
Non-qualified plans14%10%39%
Strategic partnerships31%26%19%
ETFs2%4%-50%
Other workplace benefits5%n/an/a
Retirement income discussions14%18%-24%
Health care2%6%-59%