Cogent Reports: Soft Factors Seal the Deal in DC Record Keeper Selection

CAMBRIDGE, Mass.--()--Selecting a new defined contribution (DC) plan record keeper is a protracted and labor-intensive event that plan sponsors avoid until necessary, but when it comes time to make a decision, the soft factors of a relationship are the key components to winning new business. This and other findings are included in DC Sponsor Conversations: A Seat at the Table™, a Cogent Reports™ study from Market Strategies International.

While the intermediary expertise is integral to providing a fully vetted shortlist of record keepers to consider, the plans often appear rather homogenous. In such circumstances, plan sponsors say the face-to-face meeting is a differentiator when it comes time to make the final choice. As one plan sponsor puts it:

“The face of the company that came to our headquarters—it’s trust. Do I trust this guy with my money? Because this is a serious decision…it’s a long-term decision.”

Plan sponsors evaluate plan providers the same way they evaluate a potential employee, because sponsors anticipate working closely with their provider from time to time for help meeting their fiduciary responsibility or providing participant education.

“We run an annual plan sponsor report called Retirement Planscape® that found plan sponsors value ‘easy to do business with’ as the most important factor when selecting a plan provider—which begs the question, what does ‘easy to do business with’ mean? This prompted us to conduct this qualitative study to get into the minds of plan sponsors and how they truly make decisions,” says Ellie Bond, product director and lead author of the report. “This research has allowed us to get a much clearer definition of satisfaction statements that we track annually, and we found that ‘easy to do business with’ specifically points to the importance of human interaction, both during the pitch process and beyond.”

About the DC Plan Sponsor Conversations: A Seat at the Table Study

Cogent Reports conducted a series of focus groups with a total of 67 DC plan sponsors across three major US markets in March of 2014. The report explores the priorities driving plan sponsors’ business decisions and affecting their perceptions of and experience with providers and investment managers serving the DC space. Cogent Reports segmented the focus groups by business size, lending a perspective that is also represented within the analysis.

About Market Strategies International and Cogent Reports™

Market Strategies International is a market research consultancy with deep expertise in telecommunications, consumer/retail, energy, financial services, healthcare and technology. Offering custom research services and syndicated research products, the firm provides insights from more than 75 countries, focused in the areas of brand, communications, CX, product development and segmentation. Its syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends and evaluate and monitor their brand and products within the competitive landscape. Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China.

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Market Strategies International
Anne Fallon, 617.715.7611

Release Summary

Direct contribution plan sponsors say that personal trust and other relationship "soft factors" are the key components when choosing a new plan record keeper.



Market Strategies International
Anne Fallon, 617.715.7611