401k Exchange Small Market 2008
Mid-Year Provider Ratings Drop

The Weekly Exchange, August 13, 2008, Industry Insight from Fred Barstein

As with the Mid Market ($10-$100 million), satisfaction among Small Market ($1-$10 million) plan sponsors dropped significantly. Satisfaction fell by 15% for fund services and 13% for record keeping and administrative services as compared to results at the end of 2007 based on surveys completed by 401kExchange with over 15,000 sponsors from January 1-June 30, 2008. Though the stock market can have a dramatic affect on satisfaction levels, there is no doubt that sponsors are getting more sophisticated and are less satisfied with overall levels of service. The big question is whether the rise in dissatisfaction will result in plan movement.

CPI topped all providers for fund related services while Benefits of Missouri grabbed top honors for record keeping and administration; CPI’s ratings improved from 2007 while Benefits of Missouri has never had enough surveys to qualify. Daily Access broke into the top 10 fund category along with larger vendors like Vanguard and JP Morgan; T Rowe, which outsources record keeping to BFDS in the small market, gained top honors in the administrative and record-keeping category along with Baden, Newport and Oppenheimer. Independent TPA/record keepers have grown in the small market with larger ones like CPI, Daily Access and Newport getting national attention while smaller ones are gaining traction giving national providers a run for their money. As a class, independents now have a greater market share than even insurance companies for plans under $10 million and offer a viable alternative to advisors looking for completely open investment platforms, greater fee disclosure and lower costs. Large, national providers offer more sales support and better education and enrollment materials; their edge on record-keeping technology is getting smaller and becoming less important.

Fund Manager 2008
Mid Year
# of Surveys % Rated 4 or 5 2007 Rankings
1 CPI Qualified Plan Consultants  33 66.67%  
2 Fidelity American Life  31 64.52%  
3 Vanguard Group, The  167 60.48%  
4 Mutual of America  25 60.00% 10
5 JP Morgan  42 59.52% 9
6 Marshall & Ilsley Trust Co  49 59.18% 1
7 Guardian Life Insurance Co  75 58.67%  
8 Branch Bank & Trust  62 56.45%  
9 American Funds  830 56.27% 6
10 DailyAccess Corporation  34 55.88%  
   Market Total  15,526 51.04%  
         
Plan Administrator/ RecordKeeper 2008 Mid Year # of Surveys % Rated 4 or 5 2007 Rankings
1 Benefits of Missouri Inc  28 71.43%  
2 T Rowe Price  65 67.69%  
3 Baden Retirement Plan Services  43 67.44%  
4 JP Morgan  26 65.38%  
5 Vanguard Group, The  88 64.77%  
6 Third Party Administrators Inc.  28 64.29%  
7 Newport Group  70 64.29%  
8 Oppenheimer Funds  33 63.64%  
9 Marshall & Ilsley Trust Co  46 63.04% 6
10 NIFI Companies  43 62.79% 1
  Market Total 15.364 55.94