When asked what advisers charge
to plans of various sizes, we received
answers both in basis points and flat
fee or dollar amounts. There were some
significantly wide ranges, especially in
the $1 million and $5 million basis point
ranges (1-500 bps and ½-500 bps, respectively, with median fees of 50 bps and 30
bps each). Flat fees were least expensive at the $1 million plan level ($1,500-
$17,000) and most expensive at the $250
million plan size ($40,000-$150,000).
Three out of five advisers (61.9%)
personally offer wealth management
services in addition to their corporate
advisory services. Of those who do
not, most refer those opportunities to
another member of their team, while
a quarter direct the potential client to
an outside firm (roughly one-tenth do
not make any referrals). As for what
advisers charge for that referral service,
it varies from 50-100 bps or $150-$200
per hour.
When working with retirement
plans, it can be difficult to determine if
the charges you are assessing the plan
sponsor are fair and reasonable (and if
you think it’s hard for advisers, consider
how much harder it can be for your plan
sponsor clients). Are your fees in line or
at either end of the extreme? —PA
in July 2009, online survey questionnaires were sent to those 8,500 people
subscribed to the PLANADVISERdash
e-mail newsletter, as well as to
1,000 advisers taken from client lists
supplied by dc recordkeepers. of
the 324 responses, 267 were considered valid. the questionnaire, developed by PLANADVISER editorial and
research staff, consisted of more
than 60 questions, with a significant
emphasis on the scope of the adviser’s qualified plan business.
Plan services
asset allocation modeling
attendance at inv/ret plan committee meetings
Benchmarking for defined contribution plan provider
communication policy statement design
compliance reviews
dB plan design
dc plan design
enrollment meetings
employee group meetings, ongoing
employee meetings, one-on-one
fiduciary and fund governance
individual participant investment advice
investment monitoring/committee meetings
investment policy statement design
Manager search/fund replacements
Nonqualified plan design
ongoing participant education
private wealth/Hce services
provider fee analysis
Vendor search/Rfp
Vendor/fee review
written service contract/service guarantee
do you provide wealth management services?
z yes 61.9%
z No 38.1%
Included in annual retainer
95.5%
99.4%
92.5%
93.4%
93.2%
73.6%
91.0%
95.9%
96.0%
92.1%
95.8%
84.1%
99.4%
95.6%
98.2%
72.1%
95.2%
62.6%
95.1%
82.2%
92.7%
95.6%
If not included, price
$100,000, 15bps
$225/hr
$7,500-$20,000, $150/hr-$225/hr
$2,500, $10,000, $225/hr
$2,500, $20,000, $150/hr-$225/hr
$2,000-$5,000, $150/hr-$300/hr
$1,500-$5,000, $150/hr-$225/hr
$1,000/day, $225/hr
$225/hr
$1,500/day, $225/hr
$5,000, $225/hr
$1,500, $225/hr, 25bps-100bps
$225/hr
$500, $150/hr-$225/hr, 5bps
$3,000, $225/hr
$5,000-$10,000, $150/hr-$300/hr
$225/hr
$150/hr-$200/hr, 50bps-100bps
$225/hr
$5,000-$45,000, $150/hr-$225/hr
$2,500-$10,000, $225/hr
$225/hr
If you do not, do you:
z Refer to another member on your team
z Refer to an outside firm
z do not make any referrals
z other
59.7%
25.4%
9.0%
7.5%
