RESEARCH | December 8, 2020

2020
PLANADVISER Practice Benchmarking Survey

Reported by PLANADVISER | Art by Philip Lindeman

Survey Data

PURCHASE REPRINT WANT MORE INFO?

Survey Data

Respondent Profile
Total Retirement Plan Assets Under Advisement
Average Number of Office Locations
		1 or 2	3-5	6+
<$300MM	13%	92%	4%	4%
$300mm – $500mm	15%	96%	4%	—
>$500mm – $1B	13%	81%	11%	8%
>$1B – $2B	16%	81%	16%	3%
>$2B – $3B	13%	84%	12%	4%
>$3B – $5B	9%	72%	22%	6%
>$5B – $15B	13%	60%	24%	16%
>$15B	8%	40%	20%	40%

Average Number of Advisers in Practice
		1 or 2	3-5	6-10	11+
<$300MM	13%	81%	11%	4%	4%
$300mm – $500mm	15%	61%	36%	—	3%
>$500mm – $1B	13%	38%	38%	12%	12%
>$1B – $2B	16%	52%	35%	13%	—
>$2B – $3B	13%	28%	28%	36%	8%
>$3B – $5B	9%	17%	44%	28%	11%
>$5B – $15B	13%	12%	28%	40%	20%
>$15B	8%	—	13%	20%	67%

Types of Plans
		401(k)	403(b)	457	NQDC	Other
<$300MM	13%	81%	9%	2%	1%	7%
$300mm – $500mm	15%	77%	4%	2%	1%	16%
>$500mm – $1B	13%	78%	7%	3%	2%	10%
>$1B – $2B	16%	73%	4%	2%	3%	18%
>$2B – $3B	13%	73%	7%	3%	3%	14%
>$3B – $5B	9%	83%	5%	2%	2%	8%
>$5B – $15B	13%	82%	7%	3%	3%	5%
>$15B	8%	55%	15%	5%	7%	18%

Adviser Firm Affiliation
	2019	2020
Registered investment adviser	39%	39%
Wirehouse broker/dealer	25%	26%
Hybrid/Dually registered*	22%	22%
Independent broker/dealer	9%	11%
Other	5%	2%
Footnote: *Registered investment adviser (RIA) and broker/dealer (B/D)

Practice Structure
Does Your Practice Use a Defined Contribution Aggregator for Support?
	2019	2020
Yes	47%	51%
No	53%	49%

Most Common Defined Contribution Aggregators
	2019	2020
Global Retirement Partners (GRP) Financial	21%	28%
OneDigital	—	14%
Pensionmark Financial Group	11%	10%
Retirement Plan Advisory Group	4%	8%
NFP	9%	7%
Hub International	—	4%
CAPTRUST	4%	3%
Cetera	—	3%
SageView Advisory Group	4%	1%
Other providers	19%	21%

Do You Have a Written Business Plan That Governs Your Practice?
	2019	2020
Yes	82%	84%
No	18%	16%

Do You Provide Individual Advice or Wealth Services to Plan Participants?
	2019	2020
Yes	80%	74%
No	20%	26%

Do You Offer Health Savings Account (HSA) Consulting Services?
	2019	2020
Yes	36%	28%
No, but may in the future	47%	47%
No	17%	25%

Revenue and Fees
How Fees Are Disclosed to Plan Sponsor Clients
	2019	2020
Contract	91%	89%
Annual review	82%	82%
ERISA* 408(b)(2) disclosure statement	67%	69%
Fee disclosure statement	67%	68%
Form ADV	52%	53%
Requests for proposals	52%	47%
Footnote: *Employee Retirement Income Security Act

Average Allocation of Revenue, by Expense
	2019	2020
Adviser salary	37%	36%
Broker/dealer services	14%	16%
Staff salaries	14%	15%
General expenses	10%	10%
Travel expenses	4%	5%
Marketing expenses	4%	4%
Tools and services	5%	4%
Compliance expenses	2%	3%
All other expenses	10%	7%

Distribution of Clients, by Fee Model
	2020
Asset-based	67%
Fixed, project-based	10%
Fixed, per-participant	7%
Blend – Asset-based and fixed	4%
Other	12%

Does Compensation Vary Based on Products or Services Offered?
	2019	2020
Yes	42%	43%
No	58%	57%

Average Annual Charge for Services to Retirement Plan, by Plan Size (bps = basis points)
	$1MM	$5MM	$20MM	$50MM	$100MM	$250MM	$500MM	$1B
<1 bp	—	—	—	1%	1%	4%	8%	17%
1 – 5 bps	2%	1%	2%	4%	28%	49%	38%	20%
6 – 10 bps	1%	1%	13%	50%	47%	13%	5%	2%
11 – 25 bps	7%	27%	78%	34%	4%	—	—	—
26 – 50 bps	39%	61%	5%	1%	—	—	—	—
51 – 75 bps	28%	4%	—	—	—	—	—	—
76 – 100 bps	6%	1%	—	—	—	—	—	—
>100 bps	5%	—	—	—	—	—	—	—
Do not service this size	12%	5%	2%	10%	20%	34%	49%	61%

Broker/Dealers and Custodians
Most Common Custodians for RIAs
		% of Firms Using Each
	2019	2020
Fidelity Investments (NFS*)	47%	49%
Charles Schwab	45%	46%
Vanguard	21%	32%
Wilmington Trust	16%	28%
Matrix	15%	27%
Prudential Financial	14%	14%
TD Ameritrade	18%	14%
J.P. Morgan	6%	13%
Wells Fargo	14%	12%
State Street	2%	8%
LPL Financial	5%	7%
Pershing, LLC	6%	6%
Other custodians	17%	37%
Footnote: *National Financial Services LLC

Primary Benefits Received From Custodians
		% of Advisers Using Each
	2019	2020
Trading platform	48%	44%
Online access to trust reporting	31%	32%
Plan distribution processing (to plans)	17%	23%
Comprehensive trust and trading reports	18%	22%
Retirement specialists	14%	15%
Trading alerts	8%	11%
Other benefits	19%	16%
Custodian adds no value	27%	25%

Adviser Ratings of Their Custodians
	2019	2020
Excellent	23%	21%
Good	56%	60%
Satisfactory	17%	19%
Poor	3%	1%

Most Commonly Used Broker/Dealers
	2019	2020
Morgan Stanley Smith Barney	33%	28%
LPL Financial	17%	21%
UBS Financial Services	15%	11%
Cetera Advisor Networks	2%	5%
Merrill Lynch	4%	5%
Triad Advisors, Inc.	4%	4%
Pensionmark Securities	2%	2%
Charles Schwab	2%	1%
Lockton Financial Advisors	—	1%
NFP Securities, Inc.	4%	1%
Wells Fargo	—	1%
Other broker/dealers	17%	24%

Primary Benefits Received From Broker/Dealers
	2019	2020
Compliance oversight	91%	83%
Technology/IT support	63%	78%
Wealth management support	61%	60%
Brand name recognition	61%	59%
Investment due diligence	61%	56%
Marketing support	59%	51%
Co-fiduciary support	63%	50%
Participant education materials/support	59%	50%
Retirement plan expertise	54%	46%
Retirement plan search	41%	33%
Retirement income projection tools	41%	30%
Lead generation/referrals	26%	23%
Broker/dealer adds no value	9%	3%

Adviser Ratings of Their Broker/Dealers
	2019	2020
Excellent	41%	38%
Good	39%	48%
Satisfactory	20%	14%
Poor	—	—

Marketing and Service Models
Which of the Following Success Measures Do You Use With Retirement Plan Clients?
	2019	2020
Participation rates	92%	90%
Deferral rates of various employee segments	90%	87%
External/Competitive benchmarking of plan fees	—	79%
External/Competitive benchmarking of plan design	70%	62%
% 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%	59%
% of participants saving to the company match	56%	51%
% of participants who increased deferral rates in the prior 12 months	51%	47%
% of participants meeting projected monthly retirement income goals—i.e., $X per month in retirement	43%	38%
% of participants using advice tools/seminars offered through the plan	44%	35%
Employee satisfaction with plan, determined through a survey	32%	30%
Other	8%	7%

Technology Solutions Used by Practice
	2019	2020
Videoconferencing software	—	98%
Customer relationship management	93%	94%
Electronic signature software	—	90%
Email encryption software*	—	81%
Cloud-based document storage systems	71%	74%
Footnote: *E.g., ProtonMail, digital certificates, etc.

Importance of Wealth Management to Practice Success
	2020
Very important	45%
Moderately important	23%
Somewhat important	12%
Slightly important	14%
Not at all important	6%

Concerns and Expectations
What is the Top Concern Facing Your Practice Today?
	2019	2020
Adding new clients	43%	57%
Fee compression	43%	34%
Client retention	18%	32%
Competition/Practice differentiation	28%	32%
Government regulation	21%	24%
Participant communication/education	14%	18%
Practice management	21%	16%
Marketing	17%	15%
Overall economy	4%	13%
Staffing	27%	11%
Technology	11%	10%
Compliance/Fiduciary issues	17%	8%
Profitability	7%	7%
Plan sponsor communication/education	3%	5%
Succession planning	3%	3%

What Do You Predict Will Be the Most Significant Growth Area/Strategy for Your Practice in the Next 12 Months?
	2020
Winning plans from other retirement plan advisers	59%
Helping plan sponsors comply with fiduciary duties	50%
Managing plan fees and fee benchmarking	44%
Developing/Evaluating financial wellness programs	43%
Providing participants with one-on-one planning advice	41%
Providing investment committee education	40%
Improving the online participant experience	27%
Advising on technology to support participant outcomes	24%
Performing DC plan recordkeeper due diligence	22%
Helping companies start new retirement plans	22%
Helping select retirement income strategies	22%
Reviewing fund performance and fees	21%
Selecting target-date funds	21%
Helping select/monitor core investment menu	20%
Conducting employee enrollment meetings	19%
Managing employee communications	19%

How Confident Are You That Most of Your Plan Sponsor Clients' Employees Will Achieve Their Retirement Income Goals by Age 65?
	2019	2020
Very confident	10%	6%
Confident	28%	24%
Somewhat confident	43%	45%
Only a little confident	15%	20%
Not at all confident	4%	4%
Unsure	—	1%

COVID-19 Staffing/Travel Policies
When Will Resume Client Visits in Person

Prior to this December 31	36%
Likely in Q1 2021	22%
Later in 2021	22%
Unsure	20%

When Staff Will Return to the Office

Prior to this December 31	49%
Likely in Q1 2021	16%
Later in 2021	12%
Unsure	23%

% of Staff in Work-From-Home Arrangements in 2021

<25% of staff	59%
25% – 50% of staff	27%
>50% of staff	14%