PLANSPONSOR - December 2017/January 2018 - 8

Industry Analysis
How Advisers Make Plan Decisions
Spotlighting industry data from PLANSPONSOR's proprietary research
T
he responsibilities facing employers
that sponsor qualified employee
retirement plans, including 401(k)s,
defined benefit (DB) plans, employee stock
ownership plans (ESOPs) and 403(b) plans,
are numerous and not to be taken lightly.
For many plan sponsors, ensuring compliance
with these responsibilities means hiring
and leveraging outside expertise, such
as working with an adviser or a consultant
to get help navigating the industry. One
duty with which a sponsor often seeks support
is selecting and monitoring the plan's
recordkeeper and other providers.
While a plan sponsor may have experience
with only the incumbent recordkeeper,
or perhaps with a handful of
recordkeepers he has worked with during
his career, most plan advisers bring knowledge
of a deeper pool of these providers.
With advisers suggesting appropriate
options, the plan sponsor is in a better
in one plan type or asset size, and many
provide a variety of services. Advisers
working with many recordkeepers across
their book of business are able to learn
about the wide range of investment,
" Certain recordkeepers specialize
in one plan type or asset size, and
many provide a variety of services. "
position to find a recordkeeper that can
handle the changing workplace, having
solid experience with compliance issues
and increasingly distinct employee populations.
Certain recordkeepers specialize
Top Criteria to Decide Which Recordkeeper/s Are Appropriate
1st
2nd
1 Value for price
2 Fee structure for plan
3 Investment options available
4 Website tools for participants
5 Participant education
6 Reputation
7 Value-added adviser services
8 Adviser support
9 Website tools for plan sponsors
10 Supporting materials for plan sponsors
11 Recommendation by home office
12 Brand recognition
13 Wholesalers
14 Fee structure for adviser
Source: 2017 PLANADVISER Retirement Plan Adviser Survey
46%
25%
10%
1%
3%
4%
4%
3%
2%
1%
2%
0%
0%
0%
21%
20%
19%
14%
11%
6%
2%
2%
2%
3%
0%
2%
0%
0%
technology and servicing options available.
But how can a plan sponsor be sure
1st or 2nd
67%
45%
29%
15%
14%
11%
5%
5%
4%
4%
2%
2%
0%
0%
the adviser asks the right questions of
the recordkeepers? PLANADVISER, our
sister publication, publishes its annual
Retirement Plan Adviser Survey in
which plan advisers respond to questions
including, how do they decide which
recordkeepers to suggest to plan providers
for plan sponsor clients.
Responses to the 2017 survey show
that advisers are keen to ensure that
plan sponsors' fiduciary responsibilities
are being fulfilled-specifically those
as to maintaining the " reasonableness "
of fees. The top two criteria for advisers
choosing a recordkeeper for a client are
value for price (46%) and fee structure
for plan (25%). Value for price was the
first or second choice by 67% of respondents,
indicating that employers may
have informed advisers that lowering
overall costs of the plan-such as negotiating
with providers, reducing investment
fees and attracting more assets to
the plan in order to qualify for lowercost
investments-is a key criterion.
The essential support that advisers give
is a detailed oversight of the investment
lineup, customizing it by participant
demographics. -Judy Faust Hartnett
8 PLANSPONSOR.com December 2017-January 2018
http://www.PLANSPONSOR.com
PLANSPONSOR - December 2017/January 2018

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