November 7, 2019
Superior client service and value-added benefits are even more important than razor-thin fees in the highly commoditized recordkeeping business. New research finds when defined contribution (DC) advisors are asked why they would stop working with a given plan provider, overall service quality for plan advisors (54%) and overall service quality for plan participants (45%) is cited more frequently than plan administration fees (34%). These and other findings are from Retirement Plan Advisor Trends™, an annual Cogent Syndicated study from Escalent, a top human behavior and analytics firm.
“While providing superior client service and finding new ways to deliver value-add may be daunting, these findings suggest the effort is well worth it. Developing stronger client service training initiatives and enhancing digital capabilities can ultimately be more profitable for providers than simply succumbing to cost-cutting and pricing pressures,” said Sonia Sharigian, senior product director at Escalent and author of the report. “Strong service and support capabilities can also be touted during the RFP process, which will be especially effective given DC plan sponsors’ renewed focus on plan participant service this year.”
DC advisors are working with larger plans this year, heightening their focus on more sophisticated and responsive service capabilities. The study also measures DC plan advisor satisfaction at the individual provider level on a variety of client service and support aspects. The DC plan providers earning the highest satisfaction scores in the areas most critical for continued recommendations among DC advisors are:
| Plan Advisor Service & Support | Participant Service & Support | ||
| 1 | Principal Financial Group | 1 | Principal Financial Group |
| 2 | Empower Retirement | 2 | John Hancock Retirement Plan Services |
| 3 | American Funds | 3 | Fidelity Investments |
| 4 | Lincoln Financial Group | 4 | American Funds |
| 5 | Fidelity Investments | 5 | Lincoln Financial Group + Empower Retirement (tied) |
Base: Plan advisors using and rating the brand; rankings are among the top 14 firms eligible to be rated
Source: Escalent. Cogent Syndicated. Retirement Plan Advisor Trends™. October 2019.
“These industry leaders exhibit excellence in problem resolution, online tools, websites and mobile capabilities as well as offering plan provider personnel onsite for participant education meetings,” said Linda York, senior vice president at Escalent. “That personal touch can be a real differentiator, as it helps put a face to the name of DC advisors’ preferred providers. By demonstrating their commitment to the participant, plan sponsor and DC advisor, plan providers truly set everyone—including themselves—up for success.”
About Retirement Plan Advisor Trends™
Cogent Syndicated, a division of Escalent, conducted an online survey of a representative cross section of 534 plan advisors from August 15 to August 23, 2019. 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 ±4.24% at the 95% confidence level. Escalent will supply the exact wording of any survey question upon request.
Click below for more about Retirement Plan Advisor Trends™.
