The study, conducted by Old Greenwich, Connecticut-based Brightwork Partners, in cooperation with Search401k, found that financial advisors say that the level of service they, and especially their plan sponsor clients, receive from 401(k) providers is the number one reason for selecting one 401(k) provider over another.
While nearly half (47%) described the current service levels as “pretty good”, nearly a third said the providers they present to their clients deserve a mostly negative ranking on customer management and account service issues. Slightly more than one-in-five gave their top providers excellent marks.
Room To Grow On
As for other areas of concern, financial advisors ranked their most-used providers negatively on:
- 40% – the amount of investment advice provided to participants
- 31% – minimizing total investment costs
- 29% – reducing plan costs for sponsors.
On the other hand, financial advisors had positive feedback on a number of product features, including:
- participant service and education features
- Web sites
- their qualified plan sales representatives or wholesalers.
However, according to the survey’s authors, these components are somewhat less important service dimensions from the standpoint of advisers.
The survey was conducted online in May among a sample of 689 advisers who derive a significant portion of their income from the sale of 401(k) plans.