CAMBRIDGE, Mass.--(BUSINESS WIRE)--Amid an environment in which fee scrutiny is more rigorous than ever, Empower Retirement emerges as the provider that 401(k) plan sponsors attribute most with providing good value for the money. More than four in 10 (43%) plan sponsors aware of Empower believe the firm provides good value, up from 27% a year ago. These and other findings are included in the annual Retirement Planscape®, a Cogent Reports™ study by Market Strategies International.
“Plan sponsors are more focused on fees than ever before,” notes Julia Johnston-Ketterer, senior director at Market Strategies and co-author of the report. “In fact, for the first time the aspect of reducing plan costs outranks all other priorities upon which plan sponsors are directing their attention.”
Moreover, the report found that plan administration fees are the most common reason for switching record-keepers, and likewise are an important driver of satisfaction and loyalty when client expectations are fulfilled. Importantly, the aspect of providing good value for the money is the leading enhancer to brand consideration this year, reinforcing the point that plan sponsors are seeking value from a provider beyond that which hits the bottom line of their company’s or their participants’ quarterly statements.
“The aspect of value is not just about being the cheapest,” explains Linda York, senior vice president of the Financial Services division at Market Strategies. “It’s more about justifying the fees that you charge and demonstrating the benefits of the service you provide in a way that’s meaningful to your target audience.”
The full report examines brand perceptions overall as well as by plan size segment, noting any pertinent differences. Empower, for example, has substantially improved its brand recognition in the smaller end of the market and is really resonating among these smaller plans with its commitment to the industry and efforts to serve DC plans of all types and sizes.
“Yet Fidelity Investments and Vanguard still rule the roost in the larger end of the market,” York continues, “benefiting from their well-earned reputation for being easy to do business with along with providing the greatest value for the money.”
Providers Most Associated with “Good Value for the Money”
Among all plan sponsors
- Empower Retirement
- Fidelity Investments
- American Funds
- ADP Retirement Services
- Wells Fargo
Source: Market Strategies International: Cogent Reports™, Retirement Planscape®: May 2016
About the Retirement Planscape Study
Cogent Reports conducted an online survey of a representative cross section of 1,435 401(k) plan sponsors from February 15 to March 15, 2016. Plan sponsor survey participants were required to have shared or sole responsibility for plan design, administration or selection and evaluation of plan providers or for evaluating and/or selecting investment managers/investment options for 401(k) plans. In determining the sampling frame for this study, Cogent Reports relied upon the Standard & Poor’s Money Market Directories (MMD) and ALM’s Judy Diamond Associates databases. To ensure the population for this research was representative of the universe of 401(k) plan sponsors, quotas were set during the data collection phase around key firmographic variables including total plan assets, number of plan participants, industry and geography. Minimal weighting was applied to adjust for purposeful deviations from the actual marketplace distribution. The data have a margin of error of ±2.59% at the 95% confidence level. Market Strategies International will supply the exact wording of any survey question upon request.
About Market Strategies International
Market Strategies International is a market research consultancy with deep expertise in consumer/retail, energy, financial services, healthcare, technology and telecommunications. The firm is ISO 20252 certified, reflecting its commitment to providing intelligent research, designed to the highest levels of accuracy, with meaningful results that help companies make confident business decisions.
Market Strategies conducts qualitative and quantitative research in 75 countries, and its specialties include brand, communications, CX, product development, segmentation and syndicated. Its syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends 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. Read Market Strategies’ blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn.