Favorite
investment
managers
and record-
keepers
Plan sPonsors turn to their advisers for help in finding the
best provider or investment manager. Advisers generally are
well-positioned to assist in this endeavor because, unlike
plan sponsors, they work with a variety of providers, with
more frequent interaction. Considering the wave of change
that has swept over these firms in the past year, it perhaps
is not surprising to see some shifts in preferences among
adviser respondents to PLANADVISER’s annual survey.
Fidelity Investments and Newport Group were in the top
three spots for best service to small plans, mid-size plans,
and large plans. ADP Retirement Services and New York Life
Retirement Plan Services each appeared as best in two plansize categories.
Advisers were asked not only the fund families they like to
work with (American Funds was mentioned on nearly every
list) but also the mutual funds they most recommend to
clients, including target-date and target-risk suites. A noticeable change in responses—perhaps related to the market
conditions of the past year—was a surge in popularity of the
PIMCO Total Return funds as the mutual fund most recommended to a plan sponsor, cited by 37% of advisers. There
was also a shift in what advisers said were the fund types
that belong on an “ideal” defined contribution investment
lineup. While large cap value, large cap growth, and international ruled the day (90.1% of survey respondents each),
target-date funds declined significantly in the rankings this
year, falling to sixth place (71.0%), behind fixed income/
stable value (87.8%), large cap core (77.9%), and small cap
growth (74.8%).
Diversity remains the order of the day and, in many categories, those in the top position garnered less than one-fifth
of the vote. In fact, few categories of the top three providers
or managers earned the recommendation of even half the
respondents. —PA
Methodology: In July 2009, a 60-question online survey, developed
by the PLANADVISER editorial and research teams, was sent to 8,500
people subscribed to the PLANADVISERdash e-mail newsletter, as
well as to 1,000 advisers taken from client lists supplied by defined
contribution (DC) recordkeepers. Of the 324 responses, 267 were
considered valid. In order to rate DC recordkeepers, advisers had
to be “personally involved in evaluating and recommending plan
providers/recordkeepers on behalf of qualified plan clients.” For
providers to be listed in the perception category, they had to receive
a minimum of 40 favorability responses. In order to rate investment
managers, respondents had to be “personally involved in evaluating
and recommending fund choices on behalf of qualified plan clients.”
