DC Advisors Don’t Feel Support in Wake of DOL Fiduciary Ruling

Insights Powered by Cogent Reports™    


The Department of Labor (DOL) fiduciary ruling, despite not being fully enacted, as well as the recent calls for repeal and uncertainty regarding timing, has already altered the financial services industry substantially. Heightened fee scrutiny throughout the retirement industry is causing many DC plan providers to be on the defensive, focusing on ways to avoid the next potential pitfall. And although providers may be trying, half of DC advisors report they are not getting enough support from providers with regard to the new rules and regulations. This perceived lack of support in a time of great change will undoubtedly affect advisor perceptions of and loyalty to the providers they work with regardless of the future of the ruling. Continue reading

DOL Fiduciary Ruling Prompting DC Advisors to Shift Focus

Insights Powered by Cogent Reports™    


DC Advisors Admit Focusing More on Compliance, Less on Adding Client Value as a Result of DOL Fiduciary Ruling

As previously predicted, an overwhelming 73% of financial advisors agree that the DOL fiduciary ruling is driving the industry toward a fee-based compensation structure, causing a significant amount of anxiety among advisors, and DC advisors are no exception. As a result, many DC advisors are altering their approach to rollover/distribution advice and are spending more time thinking about compliance than about adding value for their clients.

Emerging DC advisors (advisors managing less than $10M in DC assets) are more likely than Established DC advisors (managing $10M+ in DC assets) to succumb to knee-jerk emotions arising from the threat of lawsuits and broker checks and blemishes on the overall industry reputation. This could be a result of more limited resources within their advisory firms to deal with these potential costs. Continue reading

Bridging the Great Divide between Retail and DC

Insights Powered by Cogent Reports™    

Bridging the Great Divide

For many investment managers, growth comes easier in the retail market than in the DCIO space. And for good reason. DC plan advisors report working with half the number of investment managers they utilize with clients in their retail businesses—an average of 4.7 firms in the DC market compared with 10.9 firms in the retail market. However, firms that manage to secure relationships with a DC plan advisor are reaping the benefits as these producers are much more loyal to the fewer investment managers they utilize.

The average NPS® score for DC investment managers among DC producers is 42 compared with an industry average of -9 for mutual fund providers in the retail market. Continue reading

Getting on DC Advisors’ Short List

Insights Powered by Cogent Reports™   

Getting on the Short List

DC advisors maintain a limited set of go-to providers, as they continue to recommend just 2.4 plan providers on average for prospective clients to consider. Remarkably, nearly one-third of DC advisors (32%) recommend only one plan provider to prospective clients, creating a daunting challenge for DC recordkeepers that are striving to gain advisors’ attention. Moreover, the implications of securing a spot on DC advisors’ consideration sets can be huge—as these advisors work with an average of just 2.7 plan providers for all of their DC business.

When asked about the specific reasons why they recommend particular firms, cost is the main reason cited by Established DC advisors (those managing $10 million or more in DC AUM). Meanwhile, Emerging DC advisors managing less than $10 million in DC AUM tend to gravitate toward firms they are already familiar with, citing existing relationships as their primary reason for recommending a specific provider. Continue reading