Plan sponsors still initiate most of the contact with their providers, the study showed. More than 85% of plan sponsors reported talking or exchanging e-mails with their provider on a regular basis.
It isn't surprising that smaller employers feel neglected, said Rick Meigs, founder of 401khelpcenter.com LLC in Portland, Ore.
“A lot of the major vendors don't even come into that marketplace,” he said. “What that leaves is more-expensive insurance products and a few niche players who are willing to get into that market.”
Right now, it is simply too expensive for providers and financial advisers to spend a great deal of time servicing small companies, Mr. Meigs said.
Across all size segments, when asked what their plan providers needed to do to earn a grade of A for their relationship management efforts, the most frequently mentioned action was to be more proactive with suggestions to improve the plan. Sponsors of midsize plans also cited a desire for the provider's staff members to develop a better understanding of their company.
Sponsors of plans with assets of less than $10 million mentioned the need for their providers to be more responsive, particularly in terms of returning calls promptly.
It is difficult for providers and advisers to be responsive to smaller clients, because it is simply too costly, Mr. Meigs said.
It is common for smaller companies to feel slighted, said Gerald M. O'Connor, a director at Spectrem.
“Every plan sponsor would like to feel like they're on the "very important customer' list,” he said.
“When you get to small companies, that's very hard to do,” Mr. O'Connor said. “The only way you can service small companies is to standardize a lot of things.”
At Fort Worth, Texas-based American Beacon Advisors Inc., which is a wholly owned subsidiary of Fort Worth-based AMR Corp., servicing its American Airlines Inc. subsidiary takes a huge chunk of time, said Wyatt Crumpler, vice president of trust investments. His company oversees American's $8.1 billion defined benefit plan and the company's $6.6 billion defined contribution plans.
AMR has agreed to sell American Beacon Advisors, and the deal is expected to close this summer. Mr. Crumpler knows that his company's relationship with American is unique, but he also agrees that larger companies often get more attention than smaller firms.
“We meet once a quarter with the pension committee, and as needed, we meet more often. We're essentially updating them quarterly with what's going on,” Mr. Crumpler said.
“They're located just down the street,” he said. “I can walk there.”
Another issue that bothers plan sponsors is turnover in a provider's customer service staff.
Overall, 9% of sponsors said turnover caused major service problems for them. Another 23% said that turnover had caused minor problems.
It is impossible to avoid turn-over, but providers and advisers must have a plan in place to deal with it, Mr. O'Connor said.
Overall, 5% of sponsors said they were very likely to switch plan providers over the coming year. Another 15% indicated they were somewhat likely to do so.
Lisa Shidler is a reporter with InvestmentNews, a sister publication of Pensions & Investments.