RESEARCH | December 10, 2019

2019
PLANADVISER Practice Benchmarking Survey

Reported by PLANADVISER | Art by Lars Leetaru

Survey Data

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Survey Data

Respondent Profile
Total Retirement Plan Assets Under Advisement
	Total	Top Concern	Top Growth Area Other Than 401(k) Plans	Avg # of Office Locations	Avg # of Advisers in Practice	Avg # of Retirement Plans Advised
<$100MM	11%	Fee compression	Tie − 4 factors*	1.7	3.8	55
$100mm – $500mm	17%	Adding new clients	Participant advice/education	1.6	3.3	99
$500mm – $1B	11%	Fee compression	Participant advice/education	2.2	4.9	132
>$1B – $2B	11%	Adding new clients	Participant advice/education	1.5	3.5	99
>$2B – $4B	19%	Adding new clients	Participant advice/education	2.1	4.7	126
>$4B – $10B	16%	Adding new clients	Strategic partnerships	3.0	5.9	242
>$10B – $20B	7%	Fee compression	Participant advice/education	4.8	11.0	252
>>$20B	7%	Fee compression	Participant advice/education	23.9	72.3	1,533
Footnote: *Fiduciary services, referrals, rollovers, and strategic partnerships each received the same number of votes.

Adviser Firm Affiliation
	2019	2018
Registered investment adviser	39%	23%
Wirehouse broker/dealer	25%	28%
Hybrid/Dually registered*	22%	27%
Independent broker/dealer	9%	12%
Other	5%	10%
Footnote: *Registered investment adviser (RIA) and broker/dealer (B/D)

Practice Structure
Does Your Practice Use a Defined Contribution Aggregator for Support?
	2019
Yes	47%
No	53%

Most Common Defined Contribution Aggregators
	2019
Global Retirement Partners (GRP) Financial	21%
Resources Investment Advisors	15%
Arthur J. Gallagher & Co.	11%
Pensionmark Financial Group	11%
NFP	9%
CAPTRUST	4%
RPAG	4%
SageView Advisory Group	4%
CBIZ Retirement Plan Services	2%
Other providers	19%

Do You Have a Written Business Plan That Governs Your Practice?
	2019	2018
Yes	82%	81%
No	18%	19%

Do You Provide Individual Advice or Wealth Services to Plan Participants?
	2019	2018
Yes	80%	62%
No	20%	38%

Do You Offer Health Savings Account (HSA) Consulting Services?
	2019
Yes	36%
No, but planning to	47%
No	17%

Fees/Revenue
How Fees Are Disclosed to Plan Sponsor Clients
	2019	2018
Contract	91%	82%
Annual review	82%	83%
ERISA* 408(b)(2) disclosure statement	67%	70%
Fee disclosure statement	67%	65%
Form ADV	52%	50%
Requests for proposals	52%	36%
Footnote: *Employee Retirement Income Security Act

How Advisers Are Paid for Qualified Plan Business
	2019	2018
Hard-dollar/Flat fee (regardless of size)	91%	81%
Fees based on assets	89%	92%
ERISA budget/ERISA reimbursable	57%	46%
Per project	51%	38%
Commissions/12b-1 fees (flat fee)	17%	23%
Per participant	17%	11%
Commissions/12b-1 fees (variable)	13%	14%

Average Allocation of Revenue, by Expense
	2019	2018
Adviser salary	37%	37%
Broker/dealer services	14%	22%
Staff salaries	14%	18%
General expenses	10%	7%
Tools and services	5%	3%
Marketing expenses	4%	3%
Travel expenses	4%	3%
Compliance expenses	2%	2%
All other expenses	10%	5%

Whether Compensation Varies Based on Products Or Services Offered
	2019	2018
Yes	42%	39%
No	58%	61%

Average Annual Charge for Services to Retirement Plan, by Plan Size (bps = basis points)
	$1MM	$5MM	$20MM	$50MM	$100MM	$250MM	$500MM	$1B
<1 bp	0%	0%	1%	1%	1%	8%	13%	20%
1 – 5 bps	1%	2%	3%	8%	24%	49%	37%	20%
6 – 10 bps	1%	1%	12%	45%	51%	9%	1%	1%
11 – 25 bps	5%	32%	73%	36%	4%	1%	1%	0%
26 – 50 bps	39%	57%	9%	1%	0%	0%	0%	0%
51 – 75 bps	28%	4%	1%	1%	1%	1%	1%	0%
76 – 100 bps	8%	1%	0%	0%	0%	0%	0%	0%
>100 bps	5%	0%	0%	0%	0%	0%	0%	0%
Do not service this size	15%	3%	1%	8%	19%	32%	47%	59%

Broker/Dealers and Custodians
Most Common Custodians for RIAs
	% of Firms Using Each
	2019
Fidelity Investments (NFS*)	47%
Charles Schwab	45%
Vanguard	21%
TD Ameritrade	18%
Wilmington Trust	16%
Matrix	15%
Prudential Financial	14%
Wells Fargo	14%
J.P. Morgan	6%
Pershing, LLC	6%
LPL Financial	5%
State Street	2%
Other custodians	17%
Footnote: *National Financial Services LLC

Primary Benefits Received From Custodians
	% of Advisers Using Each
	2019	2018
Trading platform	48%	47%
Online access to trust reporting	31%	24%
Robust trust and trading reports	18%	24%
Plan distribution processing (to plans)	17%	16%
Retirement specialists	14%	22%
Trading alerts	8%	10%
Other benefits	19%	13%
Custodian adds no value	27%	24%

Adviser Ratings of Their Custodians
	2019	2018
Excellent	23%	24%
Good	57%	53%
Satisfactory	17%	22%
Poor	3%	1%

Most Commonly Used Broker/Dealers
	2019	2018
Morgan Stanley Smith Barney	33%	19%
LPL Financial	17%	16%
UBS Financial Services	15%	8%
Merrill Lynch	4%	5%
NFP Securities, Inc.	4%	2%
Triad Advisors, Inc.	4%	1%
Cetera Advisor Networks	2%	8%
Charles Schwab	2%	<1%
Lincoln Investment Planning	2%	2%
Pensionmark Securities	2%	6%
TD Ameritrade	2%	2%
Other broker/dealers	17%	33%

Primary Benefits Received From Broker/Dealers
	2019	2018
Compliance oversight	91%	85%
Technology/IT support	63%	62%
Co-fiduciary support	63%	44%
Brand name recognition	61%	52%
Investment due diligence	61%	52%
Wealth management support	61%	55%
Marketing support	59%	45%
Participant education materials/support	59%	39%
Retirement plan expertise	54%	40%
Retirement income projection tools	41%	23%
Retirement plan search	41%	30%
Lead generation/referrals	26%	19%
Broker/dealer adds no value	9%	7%

Adviser Ratings of Their Broker/Dealers
	2019	2018
Excellent	41%	46%
Good	39%	42%
Satisfactory	20%	9%
Poor	0%	3%

Marketing and Service Models
Where Do You Find Most of Your New Clients?
	2019
Referrals from other professional relationships	53%
Referrals from existing clients	40%
Cold calling	5%
Seminars	1%
Other	1%

Which of the Following Technology Solutions Are Used by Your Practice?
	2019
Customer relationship management	93%
Portfolio management tools/systems	87%
Cloud-based document storage systems	71%
Financial planning software	70%
Have not implemented any of these solutions	1%

Which of the Following Success Measures Do You Use With Retirement Plan Clients?
	2019	2018
Participation rates	92%	83%
Deferral rates of various employee segments	90%	77%
External/Competitive benchmarking of plan design	70%	69%
% of participants with "appropriate" asset allocations—e.g., close to target-date fund (TDF) glide path	65%	61%
% of participants meeting retirement income replacement ratio goals—i.e., will replace X% of income in retirement	63%	56%
% of participants saving to the company match	57%	48%
% of participants who increased deferral rates in the prior 12 months	51%	52%
% of participants using advice tools/seminars offered through the plan	44%	35%
% of participants meeting projected monthly retirement income goals—i.e., $X per month in retirement	43%	33%
Employee satisfaction with plan – determined through a survey	32%	26%
Other	8%	15%
None—we have no formal plan success measures	1%	3%

Concerns and Expectations
What is the Top Concern Facing Your Practice Today?
	2019	2018
Adding new clients	43%	28%
Fee compression	43%	39%
Competition/practice differentiation	29%	25%
Staffing	27%	25%
Government regulation	21%	23%
Practice management	21%	29%
Client retention	18%	14%
Compliance/fiduciary issues	17%	22%
Marketing	17%	18%
Participant communication/education	14%	20%
Technology	11%	13%
Profitability	7%	11%
Overall economy	4%	5%
Plan sponsor communication/education	3%	10%
Succession planning	3%	12%
Fee disclosure/transparency	1%	6%

In Terms of the Number of Investment Options on Your Defined Contribution Plan Client Lineups, Have the Number of Funds Changed in the Past Year?
	2019	2018
Number of funds on DC plan lineups have increased for many/most of my DC clients	8%	10%
Number of funds on DC plan lineups have stayed the same for many/most of my DC clients	59%	65%
Number of funds on DC plan lineups have decreased for many/most of my DC clients	32%	25%

How Confident Are You That Most of Your Plan Sponsor Clients' Employees Will Achieve Their Retirement Income Goals by Age 65?
	2019	2018
Very confident	10%	8%
Confident	28%	27%
Somewhat confident	43%	44%
Only a little confident	14%	16%
Not at all confident	4%	4%
Unsure	0%	1%

What Do You Predict Will Be the Most Significant Growth Area/Strategy for Your Practice in the Next 12 Months?
	2019	2018
401(k) plans	75%	51%
Participant advice/education	29%	27%
Strategic partnerships	27%	36%
403(b) plans	25%	13%
Fiduciary services	21%	34%
Referrals	19%	30%
Nonqualified deferred compensation plans	17%	21%
Rollovers	14%	9%
Defined benefit plans	8%	15%
Plan/Fee benchmarking	7%	18%
Retirement income discussions	5%	13%
Health care plans	4%	4%
Retirement income products	3%	4%
Target-date funds	2%	3%
Fee disclosure	1%	2%
Exchange-traded funds	0%	1%
Other workplace benefits	7%	16%