RESEARCH | December 9, 2015

2015
PLANADVISER Practice Benchmarking Survey

Reported by PLANADVISER

Survey Data

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Survey Data

Respondent Profile
Total retirement plan assets under advisement
	Total	Top Concern	Growth Area*	Avg # of Office Locations	Avg # of Advisers in practice	Avg # of support staff in practice
<$10MM	2%	Fee compression	Fiduciary svcs	1.4	3.9	7.9
$10MM – $100MM	12%	Practice mgt	Fiduciary svcs	1.2	3.0	3.1
>$100MM – $200MM	14%	Gov't regulation	Fiduciary svcs	2.2	3.5	4.5
>$200MM – $400MM	20%	Gov't regulation	Referrals	1.7	4.5	5.3
>$400MM – $800MM	15%	Fee compression	Referrals	1.9	4.0	5.3
>$800MM – $1B	6%	Competition	Fiduciary svcs	2.3	5.2	8.9
>$1B – $2B	16%	Fee compression	Strategic partnerships	2.6	6.3	12.3
>$2B	15%	Fee compression	Fiduciary svcs	3.3	9.4	16.2
Footnote: *Besides 401(k) plans

Adviser firm affiliation
	2015	2014	CHANGE
National full-service wirehouse	25%	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%
Other	9%	20%	-55%

Practice Structure
Are you personally involved in evaluating and recommending fund choices in an advisory capacity with your qualified plan clients?
	2015	2014	CHANGE
Yes	93%	84%	11%
No	7%	16%	-54%

Are you personally involved in evaluating and recommending defined contribution plan providers/recordkeepers in an advisory capacity with your qualified plan clients?
	2015	2014	CHANGE
Yes	94%	85%	11%
No	6%	15%	-59%

Do you have a written business plan that governs your practice?
	2015	2014	CHANGE
Yes	84%	61%	38%
No	16%	39%	-59%

Are you a fiduciary to plan participants?
	2015	2014	CHANGE
Yes	44%	34%	29%
No	56%	66%	-15%

Are you a fiduciary to clients’ plans?
	2015	2014	CHANGE
Yes, 3(16)	5%	3%	66%
Yes, 3(21)	90%	29%	211%
Yes, 3(38)	56%	27%	109%
No	6%	24%	-74%

Do you provide individual advice or wealth services to plan participants?
	2015	2014	CHANGE
Yes	60%	60%	1%
No	40%	40%	0%

Fees/Revenue
How fees are disclosed to plan sponsor clients
	2015	2014	CHANGE
Annual review	75%	66%	14%
Contract	76%	66%	15%
Fee disclosure statement	68%	77%	-12%
Form ADV	53%	39%	36%
Request for proposals	35%	22%	61%
408(b)(2) disclosure statement	67%	n/a	n/a

Average division of revenue
	2015	2014	CHANGE
Broker/dealer	21%	19%	12%
Adviser salary	29%	34%	-16%
Partner salary	10%	7%	37%
Staff salaries	16%	13%	23%
Travel expenses	4%	3%	36%
General expenses	9%	10%	-14%
Other	12%	14%	-15%

How advisers are paid for qualified plan business
	2015	2014	CHANGE
Commissions/12b-1 fees (variable)	30%	n/a	n/a
Commissions/12b-1 fees (flat fee)	30%	n/a	n/a
Fees based on assets	88%	81%	9%
Hard dollar/flat fee	78%	51%	53%
Per participant	8%	9%	-10%
Per project	37%	21%	76%
ERISA budget/ERISA reimbursable	52%	27%	92%

Whether compensation varies based on products or services offered
	2015	2014	CHANGE
Yes	43%	42%	1%
No	58%	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 bp	3%	1%	1%	1%	1%	4%	8%	11%
1–5 bps	1%	1%	1%	3%	23%	44%	30%	17%
6–10 bps	0%	0%	9%	39%	42%	10%	6%	1%
11–25 bps	4%	25%	78%	41%	11%	2%	1%	0%
26–50 bps	46%	61%	6%	2%	0%	0%	0%	0%
51–75 bps	24%	6%	1%	0%	0%	0%	0%	0%
76–100 bps	9%	1%	1%	0%	0%	0%	0%	0%
>100 bps	0%	0%	0%	0%	0%	0%	0%	0%
Do not service this size	12%	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 2014	CHANGE
Schwab	38%	28%	35%
LPL Financial	29%	22%	31%
Fidelity (NFS)	25%	18%	41%
TD Ameritrade	19%	18%	6%
Matrix	14%	13%	9%
Pershing, LLC	10%	9%	14%
Wilmington Trust	10%	n/a	n/a
State Street	7%	n/a	n/a
J.P. Morgan	6%	n/a	n/a
Vanguard	6%	n/a	n/a
UBS	6%	n/a	n/a
Wells Fargo	5%	n/a	n/a
Securian	4%	n/a	n/a
NFP Securities, Inc.	4%	n/a	n/a
Prudential Financial	4%	n/a	n/a

Primary benefits received from custodians
	2015	2014	CHANGE
Trading platform	49%	n/a	n/a
Retirement specialists	26%
Online access to trust reporting	22%
Robust trust and trading reports	19%
Plan distribution processing (to plans)	14%
Trading alerts	6%
Other	20%
Custodian adds no value	18%

Adviser ratings of their custodians
	2015	2014	CHANGE
Excellent	34%	30%	15%
Good	48%	57%	-15%
Satisfactory	17%	12%	39%
Poor	1%	1%	-31%

Most common broker/dealers
	2015	2014	CHANGE
LPL Financial	27%	18%	49%
Morgan Stanley Smith Barney	17%	6%	192%
UBS Financial Services	7%	5%	63%
Merrill Lynch	6%	4%	46%
NFP Securities, Inc.	5%	4%	8%
Lockton Financial Advisors	3%	0%	n/a
Raymond James Financial Svcs, Inc.	2%	5%	-54%
Wells Fargo Advrs (First Clearing LLC)	2%	5%	-61%
Cambridge Investment Research	2%	3%	-39%
CapFinancial	1%	0%	n/a
M Holdings Securities	1%	2%	-39%
Charles Schwab	1%	0%	n/a

Primary benefits received from broker/dealers
	2015	2014	CHANGE
Compliance oversight	72%	66%	9%
Technology/IT support	55%	45%	23%
Brand name recognition	43%	31%	38%
Investment due diligence	42%	26%	63%
Retirement plan expertise	42%	25%	67%
Co-fiduciary support	41%	19%	117%
Wealth management support	39%	28%	39%
Marketing support	38%	25%	50%
Participant education materials	32%	16%	98%
Retirement plan search	26%	13%	97%
Retirement income projection tools	17%	14%	24%
Lead generation/referrals	14%	7%	100%
B/D adds no value	6%	11%	-48%

Adviser ratings of their broker/dealers
	2015	2014	CHANGE
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?
	2015	2014	CHANGE
Advertising (newspaper, TV, online, etc.)	0%	0%	n/a
Cold calling	4%	8%	-44%
Direct mail	0%	1%	-100%
E-mail marketing/Newsletters	2%	1%	100%
Referrals from existing clients	22%	26%	-15%
Referrals from strategic relationships	65%	59%	11%
Search engine optimization	0%	0%	n/a
Seminars	2%	2%	6%
Social media	0%	0%	n/a
Webinars	1%	0%	n/a

Which of the following success measures do you use with retirement plan clients?
	2015	2014	CHANGE
None - we do not have any formal plan success measures	3%	4%	-20%
Employee satisfaction with plan (through survey)	28%	26%	9%
External/competitive benchmarking of plan design	69%	34%	104%
% of participants using advice tools/seminars offered through the plan	31%	22%	43%
% of participants who increased deferral rates in the prior 12 months	50%	26%	92%
% of participants with "appropriate" asset allocations (i.e., close to target-date fund glide path, etc.)	57%	43%	32%
% participants saving to match	47%	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 segments	75%	65%	15%
Participation rates	82%	83%	-1%
Other	7%	n/a	n/a

Concerns and Expectations
What is your top concern facing your practice today?
	2015	2014	CHANGE
Adding new clients	26%	43%	-40%
Client retention	10%	12%	-16%
Compliance/fiduciary issues	25%	25%	0%
Competition/practice differentiation	28%	26%	8%
Overall economy	5%	7%	-23%
Fee compression	35%	23%	52%
Fee disclosure/transparency	6%	4%	60%
Government regulation	38%	23%	65%
Marketing	17%	21%	-21%
Participant communication/education	24%	16%	52%
Plan sponsor communication/education	11%	11%	3%
Practice management	28%	19%	45%
Profitability	16%	16%	0%
Staffing	21%	15%	40%
Technology	12%	9%	37%
Succession planning	7%	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 clients	11%
The number of funds on DC plan lineups have stayed the same for many/most of my DC clients	61%
The number of funds on DC plan lineups have decreased for many/most of my DC clients	28%

How confident are you that most of you plan sponsor clients’ employees will achieve their retirement income goals by age 65?
	2015	2014	CHANGE
Very confident	4%	2%	108%
Confident	25%	13%	89%
Somewhat confident	42%	41%	2%
Only a little confident	20%	29%	-29%
Not at all confident	9%	13%	-34%
Unsure	0%	2%	-85%

What do you predict will be the most significant growth area/strategy for your practice in the next 12 months?
	2015	2014	CHANGE
401(k) plans	48%	48%	0%
403(b) plans	17%	13%	34%
Plan/fee benchmarking	19%	18%	5%
Defined benefit plans	14%	10%	44%
Fee disclosure	3%	3%	8%
Fiduciary services	36%	28%	30%
Participant advice/education	33%	26%	25%
Retirement income products	6%	18%	-66%
Target-date funds	6%	6%	8%
Referrals	32%	28%	13%
Rollovers	8%	18%	-56%
Non-qualified plans	14%	10%	39%
Strategic partnerships	31%	26%	19%
ETFs	2%	4%	-50%
Other workplace benefits	5%	n/a	n/a
Retirement income discussions	14%	18%	-24%
Health care	2%	6%	-59%