NAPA Net - Polling Places 09017

What's Happening with Recordkeeping Fees?

For years, recordkeeping services – complex and difficult as they can be to provide accurately and consistently (not to mention profitably) – have been characterized (some might say disparaged) as a “commodity”, while fee compression (and the aforementioned complexities) continue to fuel industry consolidation.

And then, last week, according to the 12th Annual NEPC Defined Contribution Plan and Fee Survey http://www.napa-net.org/news/managing-a-practice/industry-trends-and-research/large-plan-recordkeeping-fees-snap-losing-streak/ , the asset-weighted average expense ratio for DC plans was found to hold steady at 0.41%, consistent with the ratio reported in NEPC’s 2016 survey (i.e., 0.42%), though both the median fee and average expense ratio have dropped substantially since NEPC first conducted this study in 2006, when per participant fees were $118 and the expense ratio was 0.57%.

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* 1. What have you seen happen with recordkeeping fees in the past year?

It's a bit of a mix.

They've generally gone down.

They've generally gone up a lot.

They've generally gone down a lot.

They've generally gone up.

Haven't really noticed any change.

Other (please specify)

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* 2. Are you seeing different trend(s) among recordkeeping fees for plans of different sizes?

Fees for large plans are rising, but for smaller plans rising.

Fees for large plans are flat, and also for smaller plans.

Fees for large plans are rising, and also for smaller plans.

Fees for large plans are flat, but for smaller plans rising.

Fees for large plans are rising, but for smaller plans declining.

Fees for large plans are falling, but for smaller plans rising.

Can't really see a generalized trend.

Fees for large plans are flat, but for smaller plans declining.

Fees for large plans are falling, and for smaller plans.

It depends on the recordkeeper and the plan.

Other (please specify)

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* 3. The NEPC report’s authors believe there’s a good chance fees will be lower again next year, based on a few different factors, including sponsors who have been considering share class and contracting changes but have not yet made them and significant numbers of vendor searches in progress that have not been captured. What do you think will be the case next year?

Fees for large plans will rise, but decline for smaller plans.

Can't really see a generalized trend.

Fees for large plans are flat, but for smaller plans rising.

Fees for large plans will fall, but will rise for smaller plans.

Fees for large plans will fall, as they will for smaller plans.

Fees for large plans are flat, but for smaller plans declining.

It depends on the recordkeeper and the plan.

Fees for large plans will rise, as they will for smaller plans.

Fees for large plans are flat, and also for smaller plans.

Other (please specify)

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* 4. It seems that about every 10 years or so, some pundit or other predict that consolidation in the recordkeeping industry will winnow it down to the point where only a handful will remain. That consolidation is surely occurring today, as it has before - and yet, while the largest recordkeepers surely continued to absorb others, and still others simply walk away, new entrants continue to emerge. A decade from now, what do you think the state of recordkeeping will be?

There will only be a handful of large recordkeepers left.

Net/net, we'll be in pretty much the same shape we are in today.

While consolidation will continue, new entrants will emerge as well.

There will be fewer, larger recordkeepers.

Other (please specify)

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* 5. Any other comments about recordkeepers, recordkeeping fees, recordkeeper consolidation, the consequences of recordkeeping consolidation, or life in general?

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* 6. What is your role working with retirement plans?

Advisor

Provider

TPA

Plan sponsor

Recordkeeper

Other (please specify)

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* 7. What size plans do you PRIMARILY work with?

Under $10 million in assets

$10-$20 million

$20-$50 million

$50-100 million

$100 million - $250 million

$250 million - $500 million

Above $500 million

Other (please specify)

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* 8. Suggestions for future survey questions?

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* 9. All responses are anonymous and confidential, of course - but if you'd like me to know who you are, or allow for a response, you can leave your email below...