Merrill Lynch, Legg Mason, Captrust Top DC Providers Survey

Plan advisors rank the best recordkeepers, DCIOs, broker-dealers, and RIAs in II’s first-ever DC Industry Leaders study.


Selecting the highest-quality service providers for defined contribution (DC) plans has never been so important and difficult. With heightened fiduciary concerns owing to increased lawsuits and regulations, DC plan sponsors need to be more vigilant than ever. One place to start: hiring the right vendors.

Institutional Investor’s inaugural DC Industry Leaders study identifies the industry’s top recordkeepers, DC investment–only (DCIO) firms, and distributors based on surveys of plan advisers managing at least $100 million and more than $500 million on average.

Respondents rated Legg Mason as the best DCIO, whereas Captrust came in first among broker-dealers and registered investment advisors (RIAs) providing services to plan advisers. Merrill Lynch earned high marks in two categories, ranking as the No. 1 retail DC recordkeeper and second-best broker-dealer/RIA.

The only other firm to crack the top five across two categories was T. Rowe Price, which ranked high for both its recordkeeping and its DCIO services.

“Most recordkeepers offer the same services, making it difficult to determine which ones are doing a good job overall and are likely to remain viable in a consolidating market,” says Fred Barstein, founder of 401kTV, who advised on the study. “It is important to know which providers offer the best services to plan sponsors and their employees.”

The study marks the first time support services from broker-dealers have ever been rated. The survey’s design and methodology were developed with guidance from Barstein, Boston Research Technologies president Warren Cormier, and an advisory board of leading institutional plan advisers.

“By focusing on wisdom from DC plan advisers that have more than $100 million in DC AUM, these results can help the entire industry to fulfill their roles and improve their respective businesses,” Barstein says. “Selection and monitoring of DC providers will finally become more ‘institutional’ — a long time coming for the retail DC marketplace.”

The best retail DC recordkeepers as rated by DC plan advisers are:

1. Merrill Lynch

2. T. Rowe Price

3. Prudential

4. MassMutual

5. Empower-Retirement

The top five DCIOs are:

1. Legg Mason

2. Allianz

3. J.P. Morgan

4. BlackRock

5. T. Rowe Price

Broker-dealers and RIAs providing the best services to plan advisers are:

1. Captrust

2. Merrill Lynch

3. Morgan Stanley

4. GRP

5. UBS

In addition to these results, in early September II will be naming the top 50 institutional plan advisers by region.

“There’s a glaring need for and lack of credible ratings in the retail DC market,” Barstein notes. “Hopefully, this study is just the beginning of efforts to bring institutional-grade research and due diligence to the retail DC market — something that is sorely needed, especially now.”