Cogent Reports: DC Advisors Are Raising the Bar

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- DC plan advisors are managing fewer plans, on average, but the asset size of those plans is trending higher. This underlying shift is impacting the types of support advisors are seeking from plan providers. In fact, best-in-class plan advisor service and support is now a top brand consideration driver for DC plan providers. However, only a handful of DC plan providers earn strong brand associations for this important attribute, which helps explain why advisors are concentrating their DC business with a few select firms. These and other findings are included in Retirement Plan Advisor Trends™, an annual Cogent Reports™ study by Market Strategies International-Morpace.

“When DC advisors are asked to prioritize specific aspects within plan advisor service and support, the availability of open architecture, fiduciary support and problem resolution rank highest. Advisor website and online capabilities along with wholesaler support also play an influential role,” said Sonia Sharigian, product director in the syndicated research division at Market Strategies-Morpace and author of the report. “DC plan providers that demonstrate proficiency in these key areas will be best positioned for new business growth.”

According to the study, plan advisors manage a median of five DC plans compared with seven plans reported in 2016 and 2017. Moreover, the pace of new-plan acquisition appears to be slowing, with DC advisors adding an average of 1.6 new plans over the past year compared with 2.1 a year ago. This contraction stems largely from producers with less than $25M in DC AUM. Meanwhile, DC advisors managing $50M+ in DC assets boast books of business of 20 plans or more and are continuing to build their DC practices by adding an average of 3.9 plans over the past year, more than double the overall average.

“With the number of advisors managing less than $25M in DC AUM retreating and the books of business among those managing $50M+ in DC assets growing, we are definitely seeing a shift in DC advisor expectations. For example, fiduciary support is becoming more important while having plan provider personnel to assist with on-site participant meetings is less critical,” added Linda York, senior vice president at Market Strategies-Morpace. “DC advisors see themselves as the quarterback of the team. They’re gravitating toward providers that support but don’t overshadow their critical role.”

When looking at the broader suite of best-in-class advisor service and support, five firms emerge as leaders; however, in the shifting landscape there remains vast opportunity for other providers to seize momentum.

Top Five Leaders for “Best-in-class Plan Advisor Service and Support”
Among Advisors managing $10M+ in DC AUM)

1. American Funds
2. Fidelity Investments
3. John Hancock Retirement Plan Services
4. Principal Financial Group
5. Empower Retirement

Source: Market Strategies International. Cogent Reports™. Retirement Plan Advisor Trends™. September 2018.

Sonia Sharigian will share more findings from the full Retirement Plan Advisor Trends report, including how the profile of the DC advisor population is changing and the keys factors that boost consideration for new business, during a special presentation next week.

About Retirement Plan Advisor Trends™

Cogent Reports conducted an online survey of a representative cross section of 521 plan advisors in August 2018. Survey participants are required to have an active book of business of at least $5 million and be actively managing DC plans. Strict quotas are set during the data collection period, and post-fielding statistical weighting (where necessary) is applied. The data have a margin of error of ±4.29% at the 95% confidence level. Market Strategies will supply the exact wording of any survey question upon request.

About Market Strategies International-Morpace

Leading market research firms Market Strategies International and Morpace bring clients closer to their customers through exceptional insights, which include deep expertise in financial services, specifically among wealth, banking, payments and insurance organizations. The firms specialize in brand, customer experience, product development and segmentation research, and are known for blending primary research with data from syndicated, benchmarking and self-funded studies to help clients succeed. The syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends and monitor their brand within the competitive landscape. Market Strategies and Morpace have earned the trust of many of the world’s top brands across the automotive, consumer & retail, energy, financial services, health, technology and telecommunications industries. They are combining into one firm as part of an acquisition of both firms by STG and will be rebranded under a new name to be announced later in 2018. With more than 450 research professionals, the collective firm is now the 15th largest market research firm in the US and top 25 globally.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181101005154/en/

Market Strategies International-Morpace
Sarah Keller, 734.779.6847
[email protected]

Source: Market Strategies International-Morpace

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