To Win and Keep Business DC Plan Providers Need a Dual Focus

Cogent Research: Focus must be on advisors and sponsors

CAMBRIDGE, Mass.–(BUSINESS WIRE)–When it comes to deciding which DC plan providers to recommend to clients, advisors prioritize their own needs. However, once a plan is in place advisors are most loyal to providers that effectively demonstrate their value and serve the needs of sponsors. This means providers need to deliver effectively for both advisors and sponsors if they want to win and keep more business.

These and other findings are included in Retirement Plan Advisor TrendsTM 2012, a new report released recently by Cogent Research, based on a nationally representative survey of 520 DC plan producers with a minimum of 5% of total AUM invested in 401(k) plans.“Obviously, there are broad set of factors that influence whether or not an advisor will consider recommending a provider, but our research suggests that unless a company demonstrates it’s easy to do business with and can support the business needs of the advisor, it’s not going to make the cut,” explains Linda York, Research Director at Cogent Research. Three firms emerge in this year’s study with the strongest position on these key drivers of consideration: American Funds, Fidelity Investments, and John Hancock Financial Services.

“Once a plan is in place,” York continues, “the emphasis shifts to demonstrating value for the money and keeping the sponsor happy, thus reducing the need for the advisor to spend too much time troubleshooting the account.” Only one firm, Fidelity Investments, ranks among the top three in the key aspects of consideration and satisfaction.

“Many providers are great at giving advisors what they need to sell plans, and others are great at giving plan sponsors best in class services, but very few have figured out how to do both. Being all things to all people isn’t easy, but it’s what providers need to do if they are to gain and keep plans sold through advisors,” York concludes. “Firms targeting this market need to excel in meeting the needs of advisors and plan sponsors simultaneously – a combination that will help them win and keep business.”

Many providers are great at giving advisors what they need to sell plans, and others are great at giving plan sponsors best in class services, but very few have figured out how to do both


Key Drivers of Consideration: Top 3 FirmsKey Drivers of Satisfaction: Top 3 Firms
Easy for advisors to do business withValue for the money
1. American Funds1. American Funds
2. Fidelity Investments2. Charles Schwab
3. John Hancock Financial Services/Nationwide Financial (tie)3. Fidelity Investments
Best-in-class plan sponsor service and supportPlan sponsor service and support
1. American Funds1. Fidelity Investments/Great-West Retirement Services (tie)
2. Charles Schwab2. Principal Financial Group
3. Fidelity Investments3. Nationwide Financial

Source: Cogent Research Retirement Plan Advisor TrendsTM 2012


About Cogent Research

Cogent Research helps clients gain clarity, obtain perspective, and formulate direction on critical business issues. Founded in 1996, Cogent Research provides custom research, syndicated research products, and evidence-based consulting to leading organizations in the financial services, life sciences, and consumer goods industries. Through quality research, advanced analytics, and deep industry knowledge, Cogent Research delivers data-driven solutions and strategies that enable clients to better understand customers, define products, and shape market opportunities in order to increase revenues and grow the value of their products and brands.