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Unlike the mid market, the 2006 401kExchange small
market ($1-$10 million) top ten list* includes lesser
known providers headed by repeat top fund managers M&I,
Standard and BB&T. Today’s fund manager are judged less
for the quality of their proprietary investments and
more for the depth and quality of outside investments as
well as employee education and fees. Top
administrators/record keepers include M&I, DAC, CPI,
Standard and ABG.
While
consolidation has hit mid-market ($10-$100 million)
providers hard, there are many more excellent
alternative choices in the small and micro markets. The
price of entry is smaller and competition is less fierce
with many more sales opportunities. Among well known
small-market providers, only Hancock, Principal and
American Funds made the top 10 fund manager list while
only Schwab, which is no longer taking new small market
plans, made the top administrator list.
While
all of the top-rated providers in our 2006 list are
worth investigating, many of them took positive steps in
the past year including:
-
Baden - recently sold to Clark Consulting, a large
non-qualified consulting group;
-
M&I - hired top industry talent to head up their
group;
-
ABG continues to grow as a consortium of top
regional TPA’s with 15 offices across the country;
-
CPI - aggressively hired sales people;
-
Standard bought Invesmart.
The
2006 ratings prove that not only is business good for
niche providers but their clients have higher than
normal levels of satisfaction. The key is to know which
provider does what well and whether they have the
capital or appetite to keep investing in new technology
and services. It’s important to ask whether these
well-rated providers will withstand attractive sales
offers from competitors desperate to grow especially as
organic growth opportunities continue to become more
difficult.
*
Though the formula for calculating rankings changed, the
survey format remained the same. This year, providers
were ranked based on the percentage of plan sponsor
clients that rated them a 5 for excellent or 4 for very
satisfied. In the past we added up all scores and
divided by the number of surveys. To qualify for our
Small-Market “Top-Rated” list, providers needed at least
40 surveys completed in 2006.
|
$1-$10 Million in Plan Assets |
|
Fund Manager 2006 |
# of
Surveys |
% Rated
4 or 5 |
2005
Ranking |
|
1. |
Marshall & Ilsley Trust Co |
66 |
92.42% |
1 |
|
2. |
Standard Insurance Co |
144 |
80.56% |
2 |
|
3. |
Branch Bank & Trust |
87 |
79.31% |
3 |
|
4. |
DailyAccess Corporation |
43 |
79.07% |
* |
|
5. |
American Funds |
973 |
78.31% |
7 |
|
6. |
New York Life |
41 |
78.05% |
|
|
7. |
John Hancock |
1,764 |
76.81% |
|
|
8. |
Securian |
176 |
76.70% |
|
|
9. |
Principal Financial Group |
1,899 |
75.83% |
|
|
10. |
First Mercantile Trust |
102 |
75.49% |
* |
|
|
Market Total |
20,186 |
71.35% |
|
|
|
|
|
|
|
|
Plan Administrator/ RecordKeeper 2006 |
# of
Surveys |
% Rated
4 or 5 |
2005
Ranking |
|
1. |
Marshall & Ilsley Trust Co |
63 |
90.48% |
2 |
|
2. |
DailyAccess Corporation |
85 |
88.24% |
* |
|
3. |
CPI |
55 |
85.45% |
8 |
|
4. |
Standard Insurance Co |
134 |
83.58% |
6 |
|
5. |
Alliance Benefit Group |
84 |
83.33% |
|
|
6. |
Milliman USA |
46 |
82.61% |
|
|
7. |
Securian |
151 |
81.46% |
|
|
8. |
Baden |
57 |
80.70% |
6 |
|
9. |
CUNA Mutual Life |
75 |
80.00% |
2 |
|
10. |
Charles Schwab |
84 |
79.76% |
|
|
|
Market Total |
19,933 |
75.67% |
|
|
* |
Did not have enough surveys to qualify in 2005 |
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