Whose data is contained in the database? The database is comprised of 401(k) fee and service information from retirement specialist advisors and advisor teams. The database is refreshed with new information as it is gathered, and contains the data of three types of practices:
Bank or Wirehouse Affiliated Financial Advisors who are paid primarily through commissions (14%)
Independent Registered Investment Advisors (RIA) who are paid either commissions or on a fee-for-service basis (53%)
Fee-Only Consultants who have no affiliations and are paid strictly fee-for-service (33%)
How many firms are in the database? How many retirement professionals? Currently the database contains fee and service information from 265 retirement specialist advisory teams, representing over 885 retirement professionals. Collectively, teams in the database advise on over 15,000 401(k) plans with qualified assets under advisement of more than $380 billion.
How do you gather the data for the database? Information is gathered directly from advisors themselves through a written or online survey and often a phone interview to clarify data/information. To ensure the quality of the database, data is refreshed regularly. In addition, the identity of the advisors/firms providing the data is not disclosed so as to protect the confidentiality of their proprietary information.
How often is the database updated? The database is updated every 12-18 months – new fee schedules are regularly gathered, and the Fee Benchmarker® tool is updated once data has been fully collected and analyzed for quality assurance.
How do you ensure the accuracy of the data? Great care has been taken with regard to the quality of the database. The fee data reflected in the database represents advisors’ fee schedules as opposed to actual fees charged for specific plans. To ensure the integrity of the data, we restrict our data to include only those fees where an advisor has a plan of that asset size. We also add new data and refresh the data in the database periodically to ensure its accuracy.
What types of benchmarking tools do you offer? We present the information from the database in two tools – a custom 4 page plan sponsor ready Fee Benchmarker® Report, and a 103 page, bound Advisor Fee Almanac.
The Fee Benchmarker® Reports, which are designed to be shown to plan sponsors, are generated online by the advisor. The report provides a comparison of the advisor’s fees and services for a specific plan to database averages. Fees are broken down by quartile as well as by business model and practice size (assets under advisement). Plans from $250,000 - $550M can be benchmarked.
The Advisor Fee Almanac is a spiral-bound ready-reference guide with fee and service details of 34 different plan sizes from $250,000 - $550M in assets. The Almanac is designed to quickly provide advisors with fee averages and services offered for different plan sizes, as well as provide information about industry trends.
What is unique about your benchmarking? The information used for benchmarking is gathered directly from the source—advisors.
How do advisors utilize the data you present? Advisors utilize the information internally to benchmark themselves and find out what others are charging and what types of services are typically offered. More importantly, advisors show their plan sponsor clients or prospects how their fees and services compare to an independent source of industry averages. The Fee Benchmarker® report makes a great addition to the plan sponsor’s fiduciary file.
Which advisors do you target to include in your database? We target retirement specialist advisors – those who are generating 50% or more of their revenue from retirement plans as a general rule. We also include firms that have a large retirement AUA or a large number of plans, as many firms may have dedicated teams focusing on retirement that represent less than 50% of overall firm revenue.
Why is there more fee information down market and less information up market? Quite simply, there are more data points available for benchmarking smaller plans because there is a larger volume of small plans than large plans. Another reason is that the larger the plan, the greater the potential for custom services and consequently, custom pricing. It is difficult to make an apples-to-apples fee comparison for these large plans (i.e., plans in excess of $650M) without doing a detailed comparison of the services being provided because pricing typically doesn’t follow a specific fee schedule.