Consultanting Firms for RFP Assistance

[Guest cole stevenson]

I am compiling a list of consultants who really know the large plan DC & DB recordkeeping marketplace. I'd appreciate hearing of past experiences or just suggested names to explore.

For now I just have WatsonWyatt and Towers Perrin. We're trying to steer away from consultants who have a recordkeeping arm within their organizations. I'd also prefer well-known firms with a national presence.

Many thanks,

Cole

[SoCalActuary]

You should also be aware of:

Hewitt

Mercer

AON

Milliman

Hay

Mellon (formerly Buck & Co.)

In addition, there are strong regional firms to consider, depending on your location.

However, a number of these firms have administrative recordkeeping services, as do the two you already mentioned.

[GBurns]

I wondered what you meant by "trying to steer away from consultants who have a recordkeeping arm within their organizations" after naming 2 that have exactly what you are steering away from.

Most if not all of the firms with "national presence" have recordkeeping arms and those that might not, if there are any, have well established arrangements that might as well be an arm.

So if you are going to maintain the integrity of your own words, I guess you should discard all the names so far, and first rethink this idea of "national presense".

I am curious as to what benefit would you get from a "national presence" that very many distinguished regional firms cannot give?

Size and brand image has never translated into quality.

[Guest PensionGuy]

There aren't many that don't have a recordkeeping arm, and I don't know why you would want one without. Our firm recordkeeps very complex plans that bundled providers won't touch or do not have sufficient experience or procedures in place to handle.

If a consultant has never worked for a recordkeeper or actually administered plans, it would be difficult for them to fully grasp how your plan will operate, and what type of administrative challenges you'll face from provider to provider given the different platforms and how they operate.

You need to meet the individuals in the firm you want handling your RFP. Since Aon and Marsh/Mercer are involved in class action lawsuits relating to their own plan in addition to the well publicized contingent commissions and volume bonuses, I wouldn't trust the firm, but rather the individual.

You can check plansponsor.com for a list of consultants, but even those listings are partially pay to play.

[E as in ERISA]

Do any of the Big Four CPA firms still do RFPs?

[Guest rmeigs]

Defined Contribution Advisors, Inc. (dcadvisors.com), PFE Group (pfegroup.com), Arnerich Massena, Inc. (am-a.com), RV Kuhns & Associates (rvkuhns.com), Schultz Collins Lawson Chambers (www.advisorsquare.com/advisors/schultzcollins/), and Independent Fiduciary Services (www.independentfiduciary.com) just to name a few.

[MWeddell]

I don't usually respond with commercial messages on these bulletin boards, but this thread invites me to do so.

I'm with Watson Wyatt, and I can tell you that we regularly perform large DC and DB outsourcing searches. Our internal statistics show we've performed 279 retirement plan outsourcing searches over the years for over $84 billion of plan assets. We spend a lot of time developing tools and databases in this area. I personally have worked on about 40 of these projects.

Watson Wyatt does not perform any qualified defined contribution plan recordkeeping in the U.S., nor do we have any alliance, referral agreement, or ownership links with firms that do that work. That's quite different that most of the major benefits consulting firms listed in SoCalActuary's post. Watson Wyatt does do some DB administration work. Usually (but certainly not always) that won't prevent us from handling combined DC/DB outsourcing searches.

That being said, nearly all firms have conflicts of interest. Doing searches is a project business with a moderately high cost of sale, so to achieve consistent profitability any firm is going to want to develop an ongoing stream of revenue. That means they'll be doing something to try to leverage their search work into ongoing relationships. Besides asking search firms you consider to disclose their conflicts of interest, consider how they are paid as a source of conflitcts too.

[GBurns]

Many have asked for disclosure of fees, expenses, compensation, relationships, investment strategies etc. The traditional answers, even when dictated by law, have turned out to be largely incomplete, evasive or outright lies.

Whether it be consultant, investment advisor, mutual fund, investment banker etc. That is why Mr. Spitzer and some states are having a field day on these same issues.