|
 Industry
Insight from Fred Barstein
Selling Season Still Robust for
Advisors
The 2009 401kExchange
Opportunity Index¹ continues to show that a significant
percentage of plan sponsors are open to changing their
advisor or adding one if they do not have one; but only a
very small percentage think the same way about their record
keeper. Down
slightly from September, 12.51% of plans interviewed in
October were thinking of changing or actively searching for
a new advisor, whereas 2.72% of plans are in play up 46%
from last month.
Up 12 % from last month, 6.51% of plans expressed that they
wanted to add or change funds.
Almost 82% of all plans under $100 million are using
an advisor, up from 79.31% at the same time last year; and
of those plans that do not have an advisor, almost 11% are
thinking of adding one.
In what is a clear shift of power, plan sponsors now
believe that advisors have a greater chance of making an
impact on improving their DC plan or fixing their problems
than their record keepers do.
While both are important, it is the carpenter, not
the tools or materials that will make the difference.
Experienced advisors are
complaining that sponsors are taking longer than ever to
make a decision, the same complaint heard from record
keepers over the past 18 months.
Changing an advisor is much less painful than
switching out a record keeper, but disrupting current
relationships can be rough.
In tough economic times, sponsors tend to be less
focused on their retirement plan.
Some advisors say that the sponsors take their advice
and information and then give it to the incumbent advisor to
make suggested improvements.
Advisors have to be more tenacious than ever in
explaining their value proposition and how they can help
translate that into tangible results for the company and
their employees.
¹ Percentage of plans that indicate they are
currently searching or thinking of changing providers
|
MICRO MARKET (<$1 MILLION) YTD
|
|
YEAR
|
2006
|
2007
|
2008
|
2009
|
|
% PLANS IN PLAY
|
7.28%
|
5.93%
|
4.60%
|
2.66%
|
|
# PLANS IN PLAY
|
23,896
|
19,463
|
15,083
|
8,713
|
|
Inc/Dec Prev. Yr (%)
|
-26.6%
|
-18.6%
|
-22.5%
|
-42.2%
|
|
SMALL MARKET ($1-$10 MILLION) YTD
|
|
YEAR
|
2006
|
2007
|
2008
|
2009
|
|
% PLANS IN PLAY
|
7.23%
|
5.13%
|
4.08%
|
2.32%
|
|
# PLANS IN PLAY
|
5,820
|
4,125
|
3,281
|
1,864
|
|
Inc/Dec Prev. Yr (%)
|
-26.3%
|
-29.1%
|
-20.5%
|
-43.2%
|
|
MID MARKET ($10-$100 MILLION) YTD
|
|
YEAR
|
2006
|
2007
|
2008
|
2009
|
|
% PLANS IN PLAY
|
7.28%
|
5.61%
|
4.55%
|
2.30%
|
|
# PLANS IN PLAY
|
800
|
617
|
500
|
253
|
|
Inc/Dec Prev. Yr (%)
|
-41.1%
|
-22.9%
|
-18.9%
|
-49.4%
|
|
LARGE MARKET ($100 MILLION-$1 BILLION)
|
|
YEAR
|
2006
|
2007
|
2008
|
2009
|
|
% PLANS IN PLAY
|
4.61%
|
5.00%
|
3.80%
|
2.03%
|
|
# PLANS IN PLAY
|
100
|
108
|
82
|
44
|
|
Inc/Dec Prev. Yr (%)
|
-58.1%
|
8.6%
|
-24.0%
|
-46.5%
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