RESEARCH | April 6, 2016

2016
PLANADVISER Adviser Value Survey

How advisers can make a difference for plans

Reported by PLANADVISER | Art by Christian Northeast

Survey Data

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Survey Data

RESPONDENT PROFILE
DC Plan Assets
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
<$1MM	6.7%	12.1%	-81.8%
$1MM – $5MM	19.6%	22.5%	-15.1%
>$5MM – $10MM	12.8%	15.5%	-20.9%
>$10MM – $25MM	15.4%	16.3%	-6.0%
>$25MM – $50MM	11.2%	9.7%	13.5%
>$50MM – $200MM	8.2%	5.5%	33.2%
>$200MM – $500MM	7.2%	4.8%	33.7%
>$500MM – $1B	12.0%	6.8%	43.3%
>$1B	6.8%	6.6%	2.9%

DC Plan Participants
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
<100	31.7%	40.8%	-28.8%
100 – 500	27.3%	28.9%	-5.6%
501 – 1,000	10.5%	8.3%	20.8%
1,001 – 5,000	17.0%	10.4%	38.5%
5,001 – 10,000	5.6%	3.6%	35.4%
>10,000	7.9%	7.9%	0.2%

DC Plan Type
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
401(k)	89.0%	83.5%	6.2%
403(b)	10.5%	14.6%	-39.9%
457	10.2%	10.0%	2.3%
Money purchase	3.5%	4.5%	-28.8%
Profit sharing	20.6%	21.1%	-2.5%
Employee Stock Ownership Plan	4.3%	4.5%	-3.4%
KSOP*	0.6%	1.0%	-77.4%
Nonqualified Deferred Compensation	14.2%	10.1%	28.5%
Simplified Employee Pension	0.5%	1.0%	-97.1%
SIMPLEˆ IRA	0.7%	1.2%	-68.9%
Footnote: *Qualified retirement plan that combines a 401(k) with an ESOP. ^Savings incentive match plan for employees' individual retirement account.

EMPLOYER MATCH
Type(s) of Employer Contributions
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Employer matching contribution*	77.6%	74.3%	4.3%
Profit-sharing/Nonelective contribution	51.0%	48.4%	5.1%
No employer contribution	10.4%	16.1%	-35.4%
Footnote: *I.e., 50% of first 6% of pay.

Match Formula
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
>100% match, up to 6% of salary	6.6%	8.1%	-22.0%
100% match, to 6% of salary	11.1%	13.0%	-17.0%
51% – 99% match, to 6% of salary	28.7%	27.7%	3.5%
50% match, to 6% of salary	23.0%	20.9%	9.5%
<50% match, to 6% of salary	22.7%	22.1%	2.3%
Other match formula	7.9%	8.3%	-4.6%

Frequency of Match or Contribution
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Annually	13.7%	15.8%	-15.1%
Quarterly	1.7%	2.6%	-52.4%
Monthly	4.0%	5.8%	-44.8%
Twice monthly	16.7%	16.6%	0.5%
Biweekly	46.0%	42.6%	7.4%
Weekly	9.4%	9.0%	4.5%
Varies	4.9%	4.8%	2.0%

Match/Contribution Vesting
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Immediately on enrollment	34.6%	34.2%	1.1%
At 6 months	0.4%	0.8%	-115.2%
At 1 year	3.0%	3.2%	-5.0%
At 2 years	5.6%	4.0%	28.3%
At 3 years	12.8%	11.0%	14.0%
At 4 years	3.9%	3.4%	12.1%
At 5 years	21.8%	24.4%	-12.0%
At >6 years	18.0%	19.0%	-5.2%

PLAN DESIGN
Implementation of DC Plan Features
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Employer match or contribution	89.6%	83.9%	6.8%
Auto-enrollment	46.3%	39.6%	14.4%
Auto-deferral increases	35.4%	31.6%	10.7%
Roth 401(k)/403(b) provision	65.4%	56.7%	13.2%
Safe harbor	46.7%	48.2%	-3.3%
Written investment policy statement	72.7%	52.3%	28.2%
Loan provision	83.1%	76.9%	7.5%
Hardship withdrawal provision	92.4%	86.7%	6.6%

Plan Eligibility
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Immediately upon hire	37.5%	35.2%	6.2%
Within 3 months	28.9%	24.3%	15.9%
Within 4 – 6 months	11.8%	13.6%	-15.3%
Within 7 – 11 months	1.3%	1.3%	-1.1%
After 1 year of employment	19.8%	23.8%	-20.5%

INVESTMENTS
Investment Types Offered in DC Plans
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Target-date funds	78.7%	73.7%	6.4%
Target-risk funds	39.8%	41.7%	-5.0%
Balanced funds	71.9%	73.3%	-2.0%
Professionally managed accounts	32.1%	31.3%	2.6%
Money market fund	60.4%	64.8%	-7.3%
Employer stock	7.1%	9.5%	-34.9%
Stable value fund	63.7%	55.6%	12.8%
Real estate/REITs*	28.7%	27.0%	5.9%
Alternative investments	4.9%	4.1%	15.6%
Socially responsible funds	10.1%	13.7%	-35.4%
Footnote: *Real estate investment trusts.

Investment Vehicles Used
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Mutual funds	93.2%	90.7%	2.7%
Separate accounts	20.1%	23.6%	-17.3%
Collective investment trusts	15.5%	14.4%	7.4%
ETFs (outside of brokerage window)	10.2%	10.0%	2.3%
Self-directed brokerage window	19.7%	20.3%	-3.0%
Mutual fund window	4.8%	3.5%	27.4%
Other	4.3%	6.0%	-41.5%

Frequency of Review of Investment Options
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Quarterly	43.4%	24.0%	44.7%
Twice a year	16.9%	17.6%	-4.2%
Annually	31.9%	39.3%	-23.2%
Every 1 – 2 years	3.4%	4.4%	-26.6%
Every >2 – 3 years	1.5%	3.3%	-124.1%
Every >3 years	0.7%	4.2%	-465.0%
Never	2.1%	7.1%	-244.7%

FEES
Average Expense Ratio of DC Investment Options
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
<0.25% (<25 BPS)	10.3%	10.0%	2.9%
0.25% – 0.50% (25 – 50 BPS)	21.2%	19.0%	10.4%
0.51% – 0.75% (51 – 75 BPS)	18.5%	17.6%	4.9%
0.76% – 1.00% (76 – 100 BPS)	15.8%	11.9%	24.8%
1.01% – 1.50% (101 – 150 BPS)	7.8%	5.5%	28.8%
1.51% – 2.00% (151 – 200 BPS)	1.1%	1.2%	-14.2%
2.01% – 2.50% (201 – 250 BPS)	0.4%	0.8%	-83.6%
>2.50% (>250 BPS)	0.1%	0.2%	-157.0%
Don't know	24.9%	33.9%	-35.9%

Frequency of Review of Actual Administrative Costs/Fees
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Annually	77.3%	73.0%	5.6%
Every 1 – 2 years	10.3%	10.0%	2.3%
Every >2 – 3 years	6.4%	6.1%	4.1%
Every >3 – 5 years	1.8%	1.9%	-3.0%
Every >5 years	0.9%	1.9%	-106.0%
Don’t know	3.3%	7.1%	-114.2%

OVERSIGHT
Frequency of Formal Evaluation of DC Provider
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Annually	56.9%	57.2%	-0.5%
Every 1 – 2 years	8.8%	9.7%	-10.4%
Every >2 – 3 years	10.4%	7.6%	26.5%
Every >3 – 5 years	13.3%	9.4%	29.4%
Every >5 years	5.5%	6.2%	-11.9%
Don’t know	5.2%	10.0%	-93.3%

Length of Relationship With DC Provider
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
<1 year	4.5%	1.7%	61.4%
1 – 3 years	13.8%	8.3%	39.6%
>3 – 5 years	15.1%	9.6%	36.2%
>5 – 7 years	13.2%	9.5%	28.2%
>7 years	51.9%	69.5%	-34.0%
Don’t know	1.5%	1.3%	15.3%

Investment Committee for the DC Plan
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Yes—employees only	42.5%	50.9%	-19.7%
Yes—only external to our company	2.6%	1.7%	33.9%
Yes—a mix of internal and external	36.0%	13.1%	63.6%
Yes—unsure of composition	1.1%	1.6%	-46.8%
No investment committee	15.4%	27.8%	-80.0%
Don’t know	2.4%	4.9%	-105.2%

DC Plan Metrics
	WITH ADVISER	WITHOUT ADVISER	% DIFF W/ADVISER
Participation rate	77.8%	78.9%	-1.4%
Participant deferral rate	6.4%	6.5%	-1.9%
% of participants with loans	14.9%	13.8%	7.6%
Average number of investment options offered	2136.0%	2101.0%	1.6%
Average number of investment options held	507.0%	511.0%	-0.8%
Average account balance	8538000.0%	8568000.0%	-0.4%
Median account balance	6833200.0%	6500000.0%	4.9%

ADVISER ROLES, RECOMMENDATION
Adviser Fiduciary Roles in Retirement Plans
	2014	2015	% difference
3(38) fiduciary	21.1%	20.6%	2.4%
3(21) fiduciary	41.9%	33.6%	19.8%
Not a fiduciary	27.5%	25.8%	6.3%
Don’t know	25.1%	20.0%	20.2%