Retirement Services Intermediaries 7

Transcription

1 Retirement Services Intermediaries 7 As 401(k) distribution continues to evolve toward greater professionalization, greater concentration in the hands of specialists and as advisors focus on themselves providing fiduciary investment services, so too has the RSI inquiry taken new forms. Among the new or expanded topics in RSI 7: Tracking the specific services advisors provide to plan sponsors (13 items) and the extent to which advisors view each service as a key part of their value proposition Understanding the relative importance of various metrics advisors use to evaluate the success of their plans Sorting out broker of record changes (only) versus (also) switching primary investment providers Tracking the apparent displacement of the traditional TPA interface service model by a fully unbundled TPA/trading platform/ria product Developing a better understanding of hybrid or duallyregistered advisors and their emerging prominence in the channel Trended Metrics RSI 7 builds on key descriptive metrics to characterize advisors practices including: Other retirement products sold and size of 401(k) cases sold Service model and investment product platforms used by case size Compensation structure and fiduciary status Business development initiatives including provider partnerships Preferred fee collection methods Track within the channel Overall 401(k) assets and years in the business Whether placing more or less emphasis on 401(k) in the future Providers used Provider Selection Criteria As always in RSI studies, the central inquiry is an exhaustive build-out of what advisors look for in a provider and how they rate the providers they use on these dimensions. This supports both a robust advisor segmentation and a richly detailed evaluation of the strengths and weaknesses of the providers they work with. Tested in this cycle: Being highly responsive to requests from you, the advisor Providing flawless service to your plan sponsor clients One Landmark Square Stamford, Connecticut Fax

2 Retirement Services Intermediaries 7 Making available an attractive selection of collective investment trusts and exchange-traded funds Offering highly effective programs to help participants make the most of their 401(k)s Offering effective retirement income solutions within the 401(k) plan Assisting you in generating IRA rollover business from participants leaving the 401(k) plans you advise Offering you the ability to create custom target date funds or asset allocation portfolios for your plans Offering an open architecture investment platform Offering optional third party fiduciary investment services including section 3(21) and 3(38) services Offering robust due diligence investment selection, monitoring and reporting services Offering net revenue pricing to plans of almost any size Accommodating multiple advisor compensation methods including paying commissions, adding wrap fees and collecting billed fees for you Having relatively low total costs including investment costs and costs to the plan sponsor Having a responsive inside sales support desk and RFP team Having knowledgeable and professional retirement plan wholesalers Having a stellar brand and outstanding reputation Other Provider-specific Findings Additionally, RSI 7 delivers the following evaluations for each provider: Whether advisors expect to use the provider more or less in the future What size case they consider the provider s sweet spot (new) Whether the provider makes it easy to sell their products, is advisor-friendly and offers superior value for the price (new) Providers Evaluated Based on channel penetration in RSI 6, we expect to report provider-level findings in RSI 7 for ADP, American Funds, AUL, Charles Schwab, Fidelity, Great-West, Hartford, ING, John Hancock, Lincoln, MassMutual, Nationwide, Principal, Prudential and Transamerica. All findings are reported to all clients. Methodology and Subscription Details This research will be conducted by telephone throughout the year among approximately 600 advisors who derive significant income from 401(k) plans. Interim findings will be reported mid-2012 with final results at year-end. Deliverables include point-of-view presentations and comprehensive interpretative decks. Contacts: Merl W. Baker [email protected] Ronald L. Bush [email protected] One Landmark Square Stamford, Connecticut Fax

3 Retirement Services Intermediaries (RSI 6) Waves 1 through 4 October 2011

4 Table of Contents - Critical Industry Trends 8 - Key Competitor Findings 10 - Methodology 15 Practice Characteristics 17 1 Share of 401(k) Income 18 - Share of Key Variables by 401(k) Share of Income 19 - Summary of Advisor Characteristics 21 - Channel 23 - Share of Key Variables by Channel Market Value of 401(k) AUM 27 2 Cross Sell from 401(k) Practice 28 3 Retirement Products Sold 39 4 Emphasis on 403(b) Plans 41 27, 28 Service Model 44 2

5 28 Service Model Recommended Most Frequently Advisor Compensation Method Fee Collection Preference Advisor as Fiduciary Formal Agreements Have Formal Agreements Agreement Specifies Fees Special Effort Minimum Balance IRA Rollovers 77 39, 40, 41 Trend: IRA Rollovers Interest in Guaranteed Income Features Write 401(k) Business as a RIA 87 44, 45 Roles: Advisor vs. Provider 89 3

6 and Types of Plans Sold Plans Sold Plans Sold Plans Wrote as a RIA Investments (% of cases sold) Service Model (% of cases sold) 109 Advisor Segment Summaries (k) Share of Income 118 Service Model Used Most Frequently 122 Wrote Business as a RIA 130 Primary Affiliation 142 Considers Self a Fiduciary 164 Compensation Method 172 Sells 403(b) 183 4

7 Case Sizes Sold 193 Gender 201 Channel Penetration 214 5, 6, 7 of Providers 215 5, 6, 7 Provider Designated One of Top Three 216 9, 12, 15 Average Percentage of Cases Placed 264 9, 12, 15 Shelf Space by Provider 265 5, 6, 7 Cross Penetration by Provider , 14, 17 Usage by Provider Priority , 14, 17 Provider Usage by Case Size , 14, 17 Provider Used for Smaller Cases , 14, 17 Provider Used for Larger Cases , 14, 17 Provider Used for Cases of Almost Any Size Fund Companies Used For 401(k) Plans 312 5

8 Provider Selection Criteria Importance of Provider Selection Criteria 320 Performance Metrics and Likely Future Use , 20, 21 Provider Ratings ,13,16 Proportion of Future Placements by Provider , 23, 24 Provider Personalities 396 Summary Profiles and Ratings by Provider 399 ADP 400 American Funds 405 AUL 424 Charles Schwab 430 Fidelity 436 Great-West 464 Hartford 478 6

9 ING 492 John Hancock 507 Lincoln National 526 MassMutual 539 Nationwide 551 OppenheimerFunds 566 Principal 572 Prudential 591 Transamerica 597 Appendices 611 Retirement Services Intermediaries field dates 612 Provider Rating Bases 613 RSI6 s Asked by Wave 614 7