Business Development


Service Model Switch Hitters

When it comes to recommending 401(k) service models to plan sponsors, do advisors stay within their comfort zone and generally recommend the same service model to most comers? Or do they move seamlessly from service model to service model, selecting different platforms based on the specifics of a case?

The answer is yes.

Advisors who recommend the TPA interface service model (think John Hancock or Nationwide) most frequently (27% of advisors) are the most flexible. Nearly six in ten (56%) also recommend a fully bundled platform (think Fidelity or Principal) at least occasionally. Almost half (48%) of these advisors sometimes go with a fully unbundled program (think Schwab or Matrix in combination with a recordkeeping TPA) as well.

  Fully Bundled Fully Unbundled
Proportion Recommending TPA Interace Most Freqently Also Recommend... 56% 48%

Most doctrinaire are those advisors who recommend a fully unbundled service model most frequently (29% of all 401(k) advisors). Barely a third of them venture into the fully bundled (30%) or TPA interface (38%) models at least occasionally.

  Fully Bundled TPA Interface
Proportion Recommending Fully Unbundled Most Frequently Also Recommend... 30% 38%

Splitting the difference are advisors who most frequently recommend a fully bundled product (43% of all advisors), more than four in ten of whom (43%) go TPA interface from time to time. But only about a third of these advisors (35%) ever recommend a fully unbundled program, perhaps because so few have the skills and sophistication to do so.

  TPA Interface Fully Unbundled
Proportion Recommending Fully Fully Bundled Most Frequently Also Recommend... 43% 35%

About the Research

These findings are based on telephone interviews with a representative crosssection of 628 advisors deriving income from 401(k) plans conducted in waves between June, 2010 and May, 2011.

About Brightwork Partners, LLC

Delivering both multi-client and custom studies, Brightwork is a research-based consulting firm with a special focus on investment, product and distribution issues in the retirement services industry; .

For more information: Merl W. Baker or Ronald L. Bush, 203.487.2000; ,







Insight and information to help you
manage and grow your business.