In spite of significant changes now in progress for the fee disclosures required from retirement fund service providers, a study of plan sponsors’ loyalty to these vendors shows increased satisfaction with them. The survey’s results may indicate that new fee transparency rules alone may not sway many plan sponsors to switch providers.
The annual study of data gathered for Chatham Partners’ Provider Loyalty Index scores found, not surprisingly, that administrative services and client service personnel were the largest determinants of overall happiness with retirement plan service vendors. Chatham provides market research including client satisfaction studies.
Chatham, using a proprietary algorithm, determined that the segment of plan administration vendor clients it surveyed that could be classified as “loyal” rose to 58 percent this year, up from 52 percent in 2011’s survey. The segment defined as “at-risk” of changing providers declined to just 16 percent from 20 percent a year ago.
On the cusp of long-anticipated increased participant fee and investment performance disclosures, 58 percent of respondents said they were satisfied with their vendors’ fees, up from 53 percent in 2011. In September, Chatham will begin a study of the impact of the new fee disclosure rules on plan sponsors.
The firm’s index measures loyalty among plan sponsors with decision-making authority for their organizations’ retirement plans and is based on comments from more than 7,000 plan sponsors who are clients of 16 of the top 20 retirement plan service providers.
The survey’s results may suggest that “during a period of increased regulatory activity, those providers who pay attention to helping their clients understand and comply with the changing rules will reap the benefit of increased client satisfaction and increased loyalty,” the Chatham Partners study said.
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