RESEARCH | December 10, 2014

2014
Practice Benchmarking Survey

The 2014 PLANADVISER Practice Benchmarking Survey

Reported by PLANADVISER

Survey Data

Respondent Profile
Total retirement plan assets under advisement
	2014
>$0 - $100,000	0.8%
>$100,000 - $1MM	2.9%
>$1MM - $5MM	3.5%
>$5MM - $10MM	5.3%
>$10MM - $20MM	7.0%
>$20MM - $50MM	10.4%
>$50MM - $100MM	9.0%
>$100MM	61.1%

Number of qualified plan clients
	2014	2013	CHANGE
1 - 10	19%	18%	6%
11 - 20	16%	15%	8%
21 - 40	17%	19%	-7%
41 - 60	14%	14%	-5%
61 - 75	7%	6%	11%
>75	27%	28%	-2%

Adviser firm affiliation
	2014	2013	CHANGE
National full-service wirehouse	15%	15%	0%
Independent broker/dealer	24%	24%	0%
Regional broker/dealer	6%	5%	34%
Insurance or bank broker/dealer	9%	6%	50%
Registered investment adviser	24%	23%	6%
Dually registered (RIA and B/D)	16%	19%	-15%
An individual adviser practice	28%
A team practice (in one office location)	46%
A team practice (spread over multiple office locations)	26%
Footnote: N/A = not applicable

Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
	2014	2013	CHANGE
Yes	84%	81%	4%
No	16%	19%	-17%

Do you have a written business plan that governs your practice?
	2014	2013	CHANGE
Yes	61%	60%	1%
No	39%	40%	-2%

Are you a fiduciary to plan participants?
	2014	2013	CHANGE
Yes	34%	33%	2%
No	66%	67%	-1%

Are you a fiduciary to clients' plans?
	2014	2013	CHANGE
Yes	23%	29%	-22%
Yes, 3(16)	3%	N/A	N/A
Yes, 3(21)	59%	57%	3%
Yes, 3(38)	27%	23%	19%
No	24%	22%	7%

Fees/Revenue
How fees are disclosed to plan sponsor clients
	2014	2013	CHANGE
Annual review	66%	71%	-7%
Contract	66%	65%	1%
Fee disclosure statement	77%	76%	1%
Form ADV	39%	38%	2%
Request for proposals	22%	21%	3%
Other	4%	6%	-24%

How advisers are paid for qualified plan business
	2014	2013	CHANGE
Commissions/12b-1 fees	50%	51%	-4%
Fees based on assets	81%	76%	7%
Hard-dollar or flat fee*	51%	50%	1%
Per participant	9%	10%	-13%
Per project	21%	21%	-1%
ERISA budget/ERISA reimbursable	27%	31%	-13%
Other	1%	2%	-37%
Footnote: *Regardless of asset size

Average annual charge for services to retirement plans, by plan size (bps = basis points)
	$1MM	$5MM	$20MM	$50MM	$100MM	$250MM	$500MM	$1B
<1 bp	3%	2%	2%	2%	2%	4%	6%	10%
1 - 5 bps	2%	2%	3%	4%	13%	26%	24%	9%
6 - 10 bps	0%	2%	7%	32%	34%	11%	1%	1%
11 - 25 bps	7%	22%	63%	31%	9%	1%	1%	0%
26 - 50 bps	33%	52%	11%	3%	1%	1%	1%	1%
51 - 75 bps	22%	10%	1%	1%	0%	0%	0%	0%
76 - 100 bps	15%	3%	1%	0%	0%	0%	0%	0%
>100 bps	5%	0%	0%	0%	0%	0%	0%	0%
Do not service this size	13%	7%	11%	27%	41%	57%	67%	79%

Broker/Dealers and Custodians
Primary benefits received from broker/dealers
	2014	2013	CHANGE
Brand name recognition	31%	26%	18%
Broker/dealer adds no value	11%	14%	-23%
Co-fiduciary support	19%	22%	-11%
Compliance oversight	66%	52%	26%
Investment due diligence	26%	30%	-14%
Lead generation/Referrals	7%	5%	36%
Marketing support	25%	23%	5%
Other	9%	11%	-15%
Participant education support	16%	N/A	N/A
Retirement income projection tools	14%	N/A	N/A
Retirement plan expertise	25%	39%	-36%
Retirement plan search	13%	N/A	N/A
Technology/IT support	45%	30%	47%
Wealth management support	28%	N/A	N/A
Footnote: N/A = not applicable

Most common custodians for RIAs
	% of RIAs using 2014	% of RIAs using 2013	CHANGE
Schwab	28%	27%	7%
Fidelity (NFS)	22%	23%	-5%
Pershing, LLC	18%	16%	17%
TD Ameritrade	18%	16%	17%
LPL Financial	13%	11%	18%
Matrix	9%	11%	-17%

Most common broker/dealers
	2014	2013	CHANGE
LPL Financial	18%	13%	36%
Morgan Stanley Smith Barney	6%	6%	0%
Raymond James Financial Svcs, Inc.	5%	2%	142%
Wells Fargo Advisors^	5%	4%	34%
UBS Financial Services	5%	4%	4%
NFP Securities, Inc.	4%	3%	44%
Merrill Lynch	4%	4%	-10%
Cambridge Investment Research	3%	2%	38%
M Holdings Securities	2%	1%	153%
Cetera	2%	1%	122%
Northwestern Mutual	2%	N/A	N/A
Park Avenue Securities	2%	N/A	N/A
Excellent	32%	34%	-5%
Good	45%	43%	5%
Satisfactory	18%	18%	1%
Poor	5%	6%	-3%
Footnote: ^Wells Fargo Advisors (First Clearing LLC)

Concerns and Expectations
What is your top concern facing your practice today?
	2014
Adding new clients	43%
Client retention	12%
Compliance/Fiduciary issues	25%
Competition/Practice differentiation	26%
Overall economy	7%
Fee compression	23%
Fee disclosure/transparency	4%
Government regulation	23%
Marketing	21%
Participant communication/education	16%
Plan sponsor communication/education	11%
Practice management	19%
Profitability	16%
Staffing	15%
Technology	9%
Succession planning	8%

What do you predict will be the most significant growth area/strategy for your practice over the next 12 months (through October 2015)?
	2014
401(k) plans	48%
Referrals	28%
Fiduciary services	28%
Participant advice/education	26%
Strategic partnerships	26%
Retirement income discussions	18%
Plan/Fee benchmarking	18%
Rollovers	18%
403(b) plans	13%
Retirement income products	10%
Defined benefit plans	10%
Nonqualified plans	10%
Health care	6%
Target-date funds	6%
Exchange-traded funds	4%
Fee disclosure	3%

Marketing and Service Models
Plan services offered as part of retainer or annual service
	2014	2013	CHANGE
Asset-allocation models	66%	70%	-5%
Attend plan committee meetings	94%	92%	2%
Benchmarking DC plan provider	86%	85%	1%
Communication policy stmt design	76%	77%	-2%
Compliance reviews	84%	85%	-1%
DB plan design consulting	45%	46%	-1%
DB pension risk transfer consulting	33%	N/A	N/A
DC plan design consulting	84%	86%	-2%
Enrollment meetings	85%	84%	1%
Employee group meetings, ongoing	87%	73%	20%
Employee meetings, one-on-one	78%	84%	-7%
Fiduciary and fund governance	88%	89%	-1%
Individual ppt investment advice	53%	49%	8%
Investment policy statement design	90%	90%	0%
Manager search/Fund replacements	91%	90%	1%
Nonqualified plan design	47%	37%	26%
Ongoing investment monitoring	94%	94%	0%
Private wealth/HCE services	29%	22%	32%
Provider fee analysis	88%	87%	1%
Vendor search/RFP	72%	69%	4%
Vendor/Fee review or benchmark study	82%	79%	5%
Written svc contract/svc guarantee	80%	84%	-5%
Footnote: N/A = not applicable

Where do you find most of your new clients?
	2014	2013	CHANGE
Referrals from other professionals	58%	59%	-3%
Referrals from existing clients	28%	26%	10%
Cold calling	7%	8%	-18%
Seminars	3%	2%	54%
Other	3%	3%	1%
Advertising (newspaper, TV, online, etc.)	0%	0%	N/A
Direct mail	0%	1%	-45%
Email marketing/Newsletters	0%	1%	-56%
Search engine optimization	0%	0%	N/A
Social media	0%	0%	119%
Webinars	0%	0%	10%