DC Advisors Shortening Their ‘Short List’ of DC Providers

A new report indicates that DC advisors are making their list, and checking it twice, as they winnow their set of “go to” providers.

Not only are they now recommending an average of just 2.2 plan providers to prospective clients, 39% DC advisors recommend only one plan provider for clients to consider, significantly higher than the 32% reported in 2015, according to the annual Retirement Plan Advisor Trends, a Cogent Reports study by Market Strategies International.

The report further finds that 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.

According to the report, the top five DC plan providers deemed “easy for advisors to do business with” are:

  • American Funds
  • Fidelity Investments
  • John Hancock Financial Services
  • Vanguard
  • Principal Financial Group

As for the top five DC plan providers said to offer “best value for the money”:

  • Vanguard
  • American Funds
  • Fidelity Investments
  • ADP Retirement Services
  • John Hancock Financial Services

Cogent Reports conducted an online survey of a representative cross section of 508 plan advisors in August 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. The data have a margin of error of ±4.35% at the 95% confidence level.

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