|
 Industry
Insight from Fred Barstein
2007 Mid-Market Provider Ratings
MARSHALL
& ILSLEY CAPTURED
top honors in the mid market ($10-$100 million)
401kExchange 2007 Ratings and Market Share Report which
included mostly familiar names. Only Standard, with their
acquisition of Invesmart, and Securian were new to the top
10 in 2007 - T Rowe Price’s and American Funds’ rankings
improved for their administrative/record keeping and
investment services respectively. Overall, 401kExchange
conducted 38% more surveys in 2007 as compared to 2006 and
ratings declined by 13% as measured by the number of
sponsors which rated their provider a 4 (very satisfied) or
5 (excellent).
Advisors
focused on the mid market will be familiar with the
top-rated providers and should be able to work with all of
them as an RIA. Experienced mid-market advisors might want
to further investigate new or lesser known providers,
including John Hancock, Standard, Securian and Marshall &
Ilsley. Advisors looking to move up market or who are
currently dabbling with larger plans will get great support
and flexible compensation models from NY Life, American
Funds, Fidelity Investments (Advisor Division) and
Principal. T Rowe Price, Vanguard and Charles Schwab are
showing signs of supporting advisors in this market but
efforts are still relatively nascent.
Decline
in ratings indicate more concern and knowledge by sponsors
overall which experienced advisors should be able to
capitalize on by presenting themselves as unbiased, informed
consultants. While warm words and slick presentations may
sway small plan sponsors where the competition is less
fierce, successful mid-market advisors must have a detailed
and proven process that evaluates record keeping and
investment quality and costs. More important, advisors
should be aiming to become successful agents by showing how
participants in their plans are better prepared for
retirement while limiting corporate liability, costs and
time.
|
Fund Manager 2007 |
# of |
% Rated |
2006 |
|
Surveys |
4 or 5 |
Ranking |
|
1 |
Marshall & Ilsley Trust Co |
30 |
80.00% |
2 |
|
2 |
New York Life |
37 |
75.68% |
1 |
|
3 |
Vanguard Group, The |
166 |
73.49% |
4 |
|
4 |
American Funds |
84 |
72.62% |
9 |
|
5 |
Standard/Invesmart |
36 |
72.22% |
|
|
6 |
John Hancock |
75 |
72.00% |
6 |
|
6 |
Securian |
25 |
72.00% |
|
|
8 |
T Rowe Price |
70 |
71.43% |
7 |
|
9 |
Charles Schwab & Co., Inc. |
131 |
69.47% |
3 |
|
10 |
Wells Fargo Bank |
75 |
66.67% |
5 |
|
|
Market Totals |
3,173 |
64.07% |
74.26% |
|
Plan Administrator/ Record Keeper 2007 |
# of |
% Rated |
2006 |
|
Surveys |
4 or 5 |
Ranking |
|
1 |
Marshall & Ilsley Trust Co |
29 |
86.21% |
5 |
|
2 |
New York Life |
31 |
83.87% |
2 |
|
3 |
T Rowe Price |
63 |
80.95% |
10 |
|
4 |
Charles Schwab & Co., Inc. |
73 |
79.45% |
1 |
|
5 |
Milliman USA |
34 |
73.53% |
6 |
|
6 |
Vanguard Group, The |
148 |
72.97% |
3 |
|
7 |
American Funds |
39 |
71.79% |
4 |
|
8 |
Fidelity Investments |
578 |
68.34% |
9 |
|
9 |
Wells Fargo Bank |
69 |
68.12% |
8 |
|
10 |
Principal Financial Group |
198 |
67.17% |
7 |
|
|
Market Totals |
3,132 |
67.62% |
77.26% |
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