2018
DC Survey: Recordkeepers

Perspective Matters: All recordkeepers can deliver exceptional service—but not all of their sponsor clients experience it.

State of the Industry

Perspective Matters

All recordkeepers can deliver exceptional service—but not all of their sponsor clients experience it

The quest for the best defined contribution (DC) recordkeeper leads down a path well-traveled by sponsors and their advisers or consultants. Each year, DC plans of all sizes collectively issue thousands of requests for proposals (RFPs) or requests for information (RFIs) in hopes of learning how plan servicing might be improved. But it can be hard to identify clear areas of differentiation among the leading providers of recordkeeping services.

Generally, our 2018 DC Survey found that all recordkeepers were successful in satisfying the majority of clients—e.g., 68% of respondents were extremely likely to recommend their provider. Similarly, 42% of all respondents reported being “completely satisfied” with their recordkeeper’s service in the 23 areas the survey covered. When viewed together, these two numbers confirm that sponsors likely have many good choices for recordkeeping services. But survey data also suggests that almost no provider universally delivers exceptional service to all clients in a given market. Fortunately, the results also highlight how and where services are most similar and where discrepencies are most apt to appear.

From a similarity perspective, sponsors were satisfied most with the individuals or teams supporting their plan. Attributes such as plan/industry knowledge, responsiveness and consistency, and regulatory/compliance support were the three highest-rated areas of service cited in the survey, with over 50% of respondents rating their vendor a perfect 10 for such services.

Access to traditional investment options—e.g., nonproprietary funds and lowest-cost share classes—received similarly high acclaim. Sponsors had less praise for their provider’s support of non-mutual-fund investment options—e.g., self-directed brokerage accounts, insurance-based products and company stock—and custom fund structures—e.g., model portfolios, collectives and separate accounts.

Satisfaction with basic plan administration functions was also comparatively high—not surprising given how administrative mistakes likely incentivize plans to change providers, and newly satisfied sponsors are often those who respond.

The first signs of differentiation emerged in the areas of technology and participant education; each was commonly cited for needing service improvement. Specifically, respondents saw many opportunities for providers to improve participant mobile apps/offerings as well as plan sponsor technologies and tools used for plan reporting and plan analytics/ benchmarking. Disappointment was also found with education programs, which continued a long history of being among the lowest-rated services in the survey.

At a macro level, such findings can partially explain variances in client satisfaction across providers, but they have more limited value in explaining variance among one provider’s clients. Yes, sponsors can encounter issues such as frequent mistakes or unresponsive account teams, which can immediately and lastingly affect satisfaction, but recordkeepers also may confront challenges—sometimes hidden. For example, satisfaction scores generally decline with plan size, suggesting that sponsor expectations remain high even as recordkeepers struggle to accommodate increasingly complex plans and higher transaction volumes.

Similarly, satisfaction is lowest in the first year after conversion but steadily increases with length of relationship. This trend is notable in that it likely accounts for the fact that sponsors, when happy, are less apt to switch providers while unhappy sponsors are less apt to stick around.

While many of these findings are consistent with prior editions of the DC Survey, sponsor expectations continue to evolve, often faster than recordkeepers anticipate. One area to monitor is information security. This was the first time sponsors cited it among their provider’s strengths or limitations. Plan sponsors can assess satisfaction with that and with more traditional service offerings via our “Best in Class” provider tables. —Brian O’Keefe

More than two-thirds of plan sponsors are extremely likely to recommend their provider

Likelihood of Recommending Recordkeeper to a Friend or Colleague

  • Extremely Likely
  • Somewhat Likely
  • Less Likely

Longer provider relationships and smaller plans have greater satisfaction

Average Net Satisfaction By Tenure With DC Plan Recordkeepers

41%
53%
62%
64%
<1 year
1 year – 3 years
>3 years – 5 years
>5 years

Total DC Plan Assets

63%
64%
63%
58%
55%
40%
<$5mm
$5mm – $25mm
>$25mm – $50mm
>$50mm – $200mm
>$200mm – $1b
>$1b