Cogent Reports: DC Advisors Reveal Their Preferred Providers

CAMBRIDGE, Mass.--()--DC advisors are trimming down their set of go-to providers, recommending an average of just 2.2 plan providers to prospective clients. In fact, 39% of DC advisors recommend only one plan provider for clients to consider, significantly higher than the 32% reported in 2015, increasing the competitive pressure on DC recordkeepers. These and other findings are included in the annual Retirement Plan Advisor Trends™, a Cogent Reports study by Market Strategies International.

“With nearly 4 in 10 DC advisors recommending just one provider, achieving that coveted spot on advisors’ recommended list has never been more daunting. As such, knowing which consideration drivers to leverage and understanding DC advisors’ brand perceptions have never been more vital,” said Sonia Sharigian, senior product manager at Market Strategies and author of the report. “Moreover, the implications of securing a spot on DC advisors’ consideration sets can be huge—as these advisors work with an average of just 2.6 plan providers across all of their DC business.”

According to the study, among Established DC producers managing at least $10 million in DC AUM, the top two brand consideration drivers―easy to do business with (a leading detractor if perceived missing) and value for the money (a leading brand differentiator)―mirror those reported among DC plan sponsors earlier this year.

“The fact that these consideration drivers are similar across both audiences is a testament to the level of influence retirement plan advisor recommendations have in the DC market,” added Linda York, senior vice president at Market Strategies. “Notably, only a handful of providers including American Funds, Fidelity, Vanguard and John Hancock are strongly associated with these key attributes. Challenger brands need to find another niche if they hope to break the hold of these dominant market leaders.”

Top Five DC Plan Providers Associated with Key Consideration Drivers
(Among Established DC Advisors)
                     
Rank         Easy for advisors to do business with         Offers best value for the money
1         American Funds         Vanguard
2         Fidelity Investments         American Funds
3         John Hancock Financial Services         Fidelity Investments
4         Vanguard         ADP Retirement Services
5         Principal Financial Group         John Hancock Financial Services

Source: Market Strategies International. Cogent Reports™. Retirement Plan Advisor Trends™: October 2016.

About Retirement Plan Advisor Trends™

Cogent Reports conducted an online survey of a representative cross section of 508 plan advisors in August of 2016. Survey participants are required to be actively managing DC plans. In determining the sampling frame for this study, Cogent Reports ensures data are representative of the DC advisor population as determined by Cogent Beat™ Advisor. Strict quotas are set during the data collection period, and post-fielding statistical weighting (where necessary) is applied. The data have a margin of error of ±4.35% at the 95% confidence level. Market Strategies will supply the exact wording of any survey questions upon request.

About Market Strategies International

Market Strategies International is a market research consultancy with deep expertise in financial services with practice areas serving wealth, banking, payments and insurance. We blend primary research with data from our syndicated, benchmarking and self-funded studies as well as Big Data to help our clients grow their businesses and brands. Market Strategies’ research specialties include brand, communications, CX, product development and segmentation.

Our syndicated products, known as Cogent Reports, are the wealth sector’s leading source for insight on the attitudes, opinions and behaviors of key investor populations, including advisors, plan sponsors and affluent and institutional investors. Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China and additional industry expertise in consumer & retail, energy, healthcare, technology and telecommunications. Read Market Strategies’ blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn.

Contacts

Market Strategies International
Lisa Viselli, 734.779.6851
lisa.viselli@marketstrategies.com

Release Summary

DC advisors are trimming down their set of go-to providers. Recommending an average of just 2.2 plan providers to prospective clients, advisors are increasing competitive pressure in the market.

Contacts

Market Strategies International
Lisa Viselli, 734.779.6851
lisa.viselli@marketstrategies.com