Administration July 12, 2011

Fiduciary Services not Top of Focus in Looking for Providers

July 12, 2011 (PLANSPONSOR.com) - Although regulatory changes to fiduciary responsibilities and disclosures loom on the horizon, plan sponsors of all sizes say that strong fiduciary support services falls low on the list of factors that influence their choice of plan providers.
Reported by

Retirement Planscape 2011, a new study by Cogent Research, based upon a representative survey of 1,600 DC plan sponsors across all plan sizes and industries, shows fiduciary support services is ranked 12th overall, being lowest among Micro plans (those who oversee plans with less than $5 million in assets) where only 9% say it matters.   

According to a press release, in terms of which companies have done a good job associating their brand with providing strong fiduciary support services among micro plan sponsors, firms like Ascensus (33%), Principal (30%), and The Standard (25%) match, or in some cases even outpace, dominant players like Vanguard, T. Rowe, and even Fidelity. However, it is worth noting that no one provider is seen as being strong in this area among a majority of micro plan sponsors, Cogent said.   

In the Mega market ($500 million or more), a different set of providers emerges as being strong on fiduciary support services, including industry leaders Vanguard (51%) and Fidelity Investments (47%) which far outpace all other providers. T. Rowe Price (31%), Hewitt (27%) and Charles Schwab (25%) – although somewhat far behind – make very good showings in the area as well. Beyond those five plan providers, no one provider garners more than a 20% share in the Mega market.   

“Plan providers have an opportunity to educate plan sponsors in the smaller end of the market about the scope of the regulatory changes, as well as to differentiate themselves by demonstrating their expertise in the area of fiduciary support,” said Linda York, Senior Product Director at Cogent Research, in the press release.

«