THREE COMPONENTS OF THE TOTAL PLAN BENCHMARK
Fi360 separately evaluates the three main cost components of a plan (recordkeeping/administration, advisory, and the investment option management fees) and then adds these together to arrive at a total plan level benchmark.
Advisory Fees
- The source is the recordkeeper data feeds that Fi360 collects.
- As of 11/30/2022, we have 42,678 plans with advisory fees reported for that month-end.
- A plan’s peer group is based on plan size only as the number of participants in the plan had little correlation with general advisor pricing to warrant breaking it down further.
Investment Option Fees
- The source is the recordkeeper data feeds that Fi360 collects.
- As of 11/30/2022, we have 258,000 plans with at least three holdings reported for that month-end for which we can calculate the average expense ratio.
- Reflect the net management fees kept by the manager and do not include any revenue sharing as that is already taken into account within the calculation for the recordkeeper and/or advisory costs.
- We will start with the net expense ratio reported on the investment (MF/ETF/CIT/GRPA) and then for any retirement share class, we will subtract the estimated revenue sharing to not double count it by utilizing the lowest cost share class as a proxy.
- Fi360 uses Morningstar’s classifications of retirement share classes.
- One noteworthy result of doing this is that the investment option fees (on a basis point perspective) do not change much on average as plan size changes. The gross expense ratio does, but that is largely due to revenue sharing which has been subtracted out in our calculations.
- A plan’s peer group is based on plan size only as the number of participants in the plan have little correlation with investment pricing to warrant breaking it down further.
Recordkeeping/Administration Fees
- The source is our software application, RFP Director, which contains a database of RFPs and the corresponding recordkeeper proposals that were submitted in response.
- As of 11/30/2022, we are including 10,000 responses submitted directly by recordkeepers over the last two years, which serve as the peer group data set.
- A plan’s peer group is based on both plan size and the number of participants as many of these costs are driven not just by plan size, but by the number of participants as well.
The plan size ranges used for advisory, investment and recordkeeping benchmarks used within the FirmPlus application are shown below. They are based on an average account balance of $100,000.
Minimum Plan Size |
Maximum Plan Size |
| $- | $500,000 |
| $500,001 | $1,000,000 |
| $1,000,001 | $3,000,000 |
| $3,000,001 | $5,000,000 |
| $5,000,001 | $10,000,000 |
| $10,000,001 | $25,000,000 |
| $25,000,001 | $50,000,000 |
| $50,000,001 | $100,000,000 |
| $100,000,001 | $250,000,000 |
| $ 250,000,001 | $ 500,000,000 |
| $ 500,000,001 | $ 10,000,000,000 |