In a recent article from PlanAdvisor, North Pier’s Search Practice Leader Gregory Metzger discusses the uptick in RFPs from plan sponsors for DC advisory services.
Retirement plan advisers may be seeing an increase in request-for-proposal evaluations, presenting both an opportunity and a risk for their businesses, according to industry participants.
The number of RFPs being asked of retirement plan advisers has grown tremendously in the last 18 months, says Jay Gepfert, president of the Culpepper Group LLC, which assists plan sponsors in evaluating advisers, recordkeepers and cybersecurity services.
“Plan sponsors and ERISA counsel are realizing that the market is tightening and that there may be a better deal out there for advisory services,” Gepfert says. “There needs to be some form of analysis every three to four years. … It doesn’t have to be a full RFP, but not doing anything over four years is a little dated.”
One key driver for plan sponsors in re-considering their adviser team is the wave of consolidation by aggregators, according to industry participants.
“Consolidation, mergers, and acquisitions in the institutional investment advisory space have also contributed to the increase in search activity,” says Gregory Metzger, practice leader for North Pier Search Consulting. “Plan sponsors should not accept the standard line of ‘nothing will change except the logo and access to more resources.’”
Metzger says that plan sponsors recognize that there is “too much is at stake” after an announcement of a merger or consolidation, and are requesting additional due diligence on their advisers.