Plan Advisers’ Value in 4 Charts

The 2024 PLANADVISER Adviser Value Survey published in September found that plan sponsors value rigorous plan governance and fiduciary guidance from their adviser teams.

That survey drew on 2,100 plan sponsors from sister publication PLANSPONSOR’s Defined Contribution Plan Benchmarking Survey. In addition, PLANADVISER asked a subset of 83 plan sponsors a few additional questions about their adviser relationships and investment decisionmaking and monitoring. Below are four highlights from that survey, in charts.

Fees Pay Off

When it comes to adviser value, there is nothing more direct than asking about the fees that plan sponsors pay for services. Here, there were heartening results among the survey pool: 91.3% said the services they received were worth the fees they paid.

That’s a feather in the cap for most of the advisers associated with the plan sponsors in this survey. But as the industry evolves, so must the services that advisers offer to their clients. How often, then, do plan sponsors conduct requests for proposal to make sure the services and fees they are getting are top of the class?

RFP Frequency

When thinking about a plan sponsor’s fiduciary commitment, it is typically better to see them going out for adviser RFPs every couple of years—even if they end up sticking with the same adviser.

For the roughly 39% of firms who have conducted an RFP in the past three years, the results are heartening. That leaves, however, another 60.5% that have not conducted an RFP in at least four years. While that may feel good to an adviser who has maintained that business, it ultimately may not be serving the adviser or the client as a best practice.

Participant Services

It has been a trend in recent years for plan advisers to offer a participant education option directly, as opposed to doing so through the recordkeeper. While that can be a resource commitment, it is also a way to add value for plan sponsors who are increasingly looking for more holistic offerings for their employees.

The PLANADVISER survey showed that while the majority of plan sponsors are getting direct participant education and advice, it is still a slim majority. It will be interesting to see if that continues to shift over time toward more direct support.

Wealth Management

Finally, the convergence of retirement planning and wealth management has taken the advisement space by storm in recent years—at least when it comes to merger-and-acquisition activity.

But where does the rubber hit the road for plan sponsors working through plan advisers on offering paid wealth management services for employees? According to the survey, the offer is at least there for the majority of plans—with 67.1% of those surveyed saying their adviser provides individual participant investment services.

Here again, it will be interesting to see how the pie changes in coming years—will wealth services take further hold? Or will the market remain somewhat bifurcated, with some plan sponsors keeping such services separate?

Findings from the 2024 PLANADVISER Adviser Value Survey can be found at this link.