2019
PLANADVISER Retirement Plan Adviser Survey

Adviser Picks

In a crowded field, which providers and investments stand out?

The 2019 PLANADVISER Retirement Plan Adviser Survey, our 12th such survey, explores the many factors that advisers consider when selecting investments and recordkeepers. It also reveals which companies they like to work with and think excel in services.

The fund family that advisers most prefer is Vanguard, followed by American Funds, T. Rowe Price, Fidelity Investments and J.P. Morgan.

As for the top five criteria advisers consider when selecting an asset management firm, these are, in descending order: performance against benchmarks, fiveyear return, Sharpe ratio, manager tenure and fee structure for plan.

Advisers nominated 77 different fund families when asked to name their top five “most preferred” families. Twenty-nine received five or more references each.

Respondents were all over the map, though, when asked what individual funds they would recommend to a plan sponsor client. They cited 255 unique funds, covering a wide range of strategies—including both active and passive management, domestic and international stocks, and bond funds. Even a few stable value and socially responsible investing (SRI) funds made the list.

Advisers’ “most preferred” funds—i.e., each voter’s first choice—make up a much narrower list—only 32 funds, just six of which were cited five or more times. Those are Fidelity 500 Index Fund, PIMCO Income Fund, T. Rowe Price Blue Chip Growth Fund, T. Rowe Price Target Date Funds, Vanguard 500 Index Fund and Vanguard Target Retirement Funds.

Also of interest, four of the top 20 most recommended funds are income funds. Qualified default investment alternative (QDIA) considerations would appear to drive many of the fund recommendations, as five of the 21 most recommended funds are target-date funds (TDFs).

When it comes to selecting recordkeepers, the top five of 14 criteria that advisers consider are value for price, website tools for participants, fee structure for the plan, investment options available, and website tools for plan sponsors.

As to rankings for individual firms themselves, Fidelity Investments was No. 1 for best overall service among mega plans—those having more than $1 billion in assets. Bank of America earned that top honor among large plans ($200 million to $1 billion) and also midsize plans ($50 million to $200 million). Empower Retirement did so with small plans ($5 million to $50 million), and Securian Financial with micro plans (under $5 million).

Advisers rank Ascensus as No. 1 when it comes to fee clarity, accounting, disclosure and benchmarking. Empower takes top honors for web tools and functionality for advisers. Bank of America is viewed as the best when it comes to regulatory/ compliance support and services. It is also seen as the leader in financial education and wellness resources. Milliman is considered the best in terms of plan design flexibility and customization.

Advisers were also asked how often they worked with a recordkeeper: once, a few times, several times or many times. The three providers worked with the most—Fidelity, Empower and Principal—had three of the eight highest recommendation rates in the survey, including the two highest scores.

That said, most recordkeepers have more advisers who are unwilling to recommend them than advisers who would strongly recommend them. Overall, the average Net Promoter Score®* for recordkeepers was -37%.

Large recordkeepers would appear to have an advantage in regard to technology solutions; those companies’ “best” technology solutions got significantly higher scores than the offerings elsewhere in the industry. —Lee Barney

Art by Harry Campbell

*Net Promoter Score® (NPS®) is based on Satmetrix Systems’ methodology and represents the percentage of respondents likely to recommend the provider minus the percentage likely to recommend against it.

Top Criteria Used to Decide Which Funds Are Appropriate for Plans