2024
PLANADVISER Retirement Plan Adviser Survey

The 2024 Retirement Plan Adviser Survey sheds light on the criteria that advisers prioritize in fund and recordkeeper selection and reveals which companies advisers most like to work with.

State of the Industry

From Basics to Differentiators

Unique plan and participant needs are important in recordkeeper selection.

The 2024 Retirement Plan Adviser Survey sheds light on the criteria that advisers prioritize in fund and recordkeeper selection and reveals which companies advisers most like to work with.

According to the survey, the top five criteria advisers use in selecting a retirement plan recordkeeper are:

  1. Value for price: 64.8%
  2. Website tools for participants: 46.2%
  3. Fee structure for plan—i.e., fee equalization, basis points vs. fixed, etc.: 41.8%
  4. Quality and consistency of sponsor support: 39.6%
  5. Payroll integration options: 37.4%

Well-functioning websites, reliability of service and competitive fees are among the basics that Rob Massa, a managing director and the Houston market retirement practice leader for Qualified Plan Advisors, says most recordkeepers provide these days. According to Massa, other basics include:

  • Providers with substantive experience in recordkeeping plans;
  • Up-to-date technology;
  • Quality cybersecurity policies, protections and participant account warranties;
  • Open architecture investment platforms;
  • Annual compliance testing and Form 5500 preparation; and
  • Live customer service support for the plan sponsor and plan participants.

“All of these are key features and a starting point for all plan sponsors,” he says.

According to Massa, the differentiators to look for from recordkeepers are determined by identifying unique needs, such as:

  • For participants: multi-language services, advice, retirement planning solutions, retirement income solutions and tools to increase participant engagement; and
  • For sponsors: payroll integration, employer stock services, help with mergers and acquisitions, medical spending account integration, savings accounts integration, plan data tracking and plan data reporting.

When selecting a recordkeeper, plan advisers should ask if the plan sponsor will have access to an experienced relationship manger, rather than just a toll-free number or a group of representatives, and whether the relationship manager will provide a cell phone number as well as an office number, Massa adds. In addition to the number of clients served in similar industries and of similar size, recordkeepers should be asked about how robust their communications are, their ability to customize solutions and their options for reporting demographic data and tracking success measures, including retirement readiness measures.

Jeff Cullen, CEO of Strategic Retirement Partners, says there are certain elements his firm actively seeks for clients that do not currently have them. First is the quality of service.

“People still matter, and this is where we see the chasm behind individual client experiences with recordkeepers,” Cullen explains. “It usually comes down to the quality of the people assigned to [the client’s] account.”

Cullen says his firm also seeks a true partnership philosophy from recordkeepers, asking, “Is the recordkeeper a partner collaborating with us for our long-term joint success?”

According to the 2024 PLANADVISER Retirement Plan Adviser Survey, cybersecurity policies and procedures ranked as the No. 10 most important criteria in selecting a recordkeeper, chosen by 20.9% of respondents. However, Cullen says it is a top differentiator.

“We want to know if they are strong enough to withstand the coming curveballs [artificial intelligence] is about to throw at them,” Cullen says.

When looking at investment options made available by recordkeepers—criteria selected by 29.7% of survey respondents—Cullen’s firm looks for open architecture in-plan income options and flexible managed accounts that also have open architecture for asset allocation algorithms.

“Selecting recordkeepers is a fiduciary responsibility, and [advisers] as plan fiduciaries have a responsibility to select what we believe is the best vendor for our client, not the one that is easy for us to do business with,” Massa says. “In short, it is much more important to focus on what is important for each individual client.”

Additional Findings

The 2024 Retirement Plan Adviser Survey shows that price and performance remain top factors for advisers when helping clients select the most appropriate fund lineups for their plans.

“Performance vs. benchmarks or peer groups” was the top factor advisers reported considering when selecting a core fund lineup (67.3%), while “total performance (5-year return)” was second (51%) and “fee structure for plan” ranked third (41.8%).

When it comes to selecting a qualified default investment alternative, “pricing and fees” was the top criteria (57.6%); “glide path construction” ranked second (48.5%)—down from more than half in the 2023 survey—and “plan demographics or participant needs” came in third (35.4%).

Capital Group, Vanguard and Fidelity Investments remain the most-recommended fund families. This year, Capital Group/American Funds and Vanguard retained the No. 1 and No. 2 most recommended target-date-fund family spots, respectively, with T. Rowe Price taking third place from Fidelity.

—Rebecca Moore