Retirement Plan Advising

Servicing retirement plans: By the numbers

Jason Carlough

September 10, 2024

Adding retirement plans to your wealth management practice can help grow your business. More than that, it can be a manageable commitment.

 

A 2024 WinMore Plans survey of 84 practices with at least 50% of revenue from retirement or a dedicated retirement plan business shows the average amount of time spent by financial professionals on plans annually. If you’re considering adding more plan business to your practice, take a look at what you might expect.

Average hours per year

As you would expect, the average amount of time spent on a plan varies by plan size. While respondents shared that they do not intend to limit service by plan size, they do find that the size of plans tends to correlate with the complexity and time needed.

 

For small plans, under $1 million in assets, the average time spent was 14 hours annually. As plans increase in size, so do hours, but not dramatically. For plans from $5 million to $10 million in assets, the average is still only 21 hours. That’s just half a work week. How much value could half a work week add to your practice over time?

Table showing financial professional hours per year by plan size, with minimum, average and maximum for each size plan. For plans with less than one million dollars: average 14, minimum 1, maximum 45. From one to 4.9 million dollars: average 17, minimum 2, maximum 60. For five to 9.9 million dollars: average 21, minimum 2, maximum 70. For 10 to 24.9 million dollars: average 30, minimum 4, maximum 85. For 25 to 49.9 million dollars: average 36, minimum 4, maximum 90. For 50 to 99.9 million dollars: average 42, minimum 6, maximum 110. For 100 million dollars and more: average 53, minimum 6, maximum 125.

Source: WinMore Plans, "Level-Up: Benchmarking Your Retirement Practice + other lessons from legends," April 4, 2024.

Days on site with participants

Similar to hours, days spent on site with participants increases with plan size. This is to be expected, as serving more participants is likely to take more time. Larger plans are also more likely to have multiple office locations. 

Table showing participant education days per year by plan size, with average, minimum and maximum for each size plan. For plans with less than one million dollars: average 1, minimum 0, maximum 2. From one to 4.9 million dollars: average 1, minimum 0, maximum 10. For five to 9.9 million dollars: average 2, minimum 0, maximum 20. For 10 to 24.9 million dollars: average 3, minimum 0, maximum 20. For 25 to 49.9 million dollars: average 3, minimum 0, maximum 30. For 50 to 99.9 million dollars: average 4, minimum 0, maximum 40. For 100 million dollars and more: average 4, minimum 0, maximum 40.

Source: WinMore Plans, "Level-Up: Benchmarking Your Retirement Practice + other lessons from legends," April 4, 2024.

Notably, some respondents opted to spend no days on participant education. Although participant education is not necessarily required, it’s often a valuable way to differentiate your service and form connections with participants. Sometimes retirement plan participants become wealth clients, so days on site can be great investments.

Meeting with plan sponsors

One last metric to consider is how frequently you’ll meet with plan sponsors. While this metric also correlates with plan size, the maximum reported number of meetings for any plan size was four. This may be a noticeable difference from high net worth wealth clients, who often require more attention.

Table showing plan sponsor meetings per year by plan size, with average, minimum and maximum for each size plan. For plans with less than one million dollars: average 1, minimum 1, maximum 2. From one to 4.9 million dollars: average 2, minimum 1, maximum 2. For five to 9.9 million dollars: average 2, minimum 1, maximum 3. For 10 to 24.9 million dollars: average 3, minimum 1, maximum 4. For 25 to 49.9 million dollars: average 3, minimum 1, maximum 4. For 50 to 99.9 million dollars: average 4, minimum 1, maximum 4. For 100 million dollars and more: average 4, minimum 1, maximum 4.

Source: WinMore Plans, "Level-Up: Benchmarking Your Retirement Practice + other lessons from legends," April 4, 2024.

Caveats to consider

Averages are useful points of reference, but keep in mind that getting started with plans will likely involve a greater time commitment. Many plan service providers can attest that, like any skill, servicing plans tends to get easier with practice.

 

Of course, there may also be surprises that could cause a plan to require more time and attention. Respondents noted fund or recordkeeper changes, leadership turnover at the sponsor and client merger and acquisition activity as complicating factors. 

Get started

If you feel confident and inspired to take on (more) retirement plan business, your Capital Group team is available to help. Reach out for guidance on resources and steps you can take today to start adding plans to your wealth management practice.

Read important disclosures

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Jason Carlough is a retirement plan counselor with 23 years of industry experience as of 12/31/23. He holds a bachelor’s degree in business and economics from Lafayette College.

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