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March 08, 2016 at 07:15 AM
Employees of firms that manage the 401(k) plans for clients also provide retirement accounts for their own employees. For the third consecutive year, we turn to BrightScope to check out which financial firms offer the best and worst retirement plans for their workers.
As in past years, firms bounced around the rankings, with last year’s No.1, Stifel, falling a bit. Also, UBS and Merrill Lynch were not rated as they were in past years.
(Related: 12 Best & Worst Broker-Dealer 401(k) Plans: 2015)
BrightScope uses 200 pieces of data to rate 401(k) plans. An algorithm then runs thousands of simulations to predict how long average participant would need to be ready for retirement.
BrightScope also qunatifies what a lower-rated plan can cost employees. It breaks out the “lost savings” to employees from saving in their plan versus the top-rated plan and the additional years they would need to work to make up that sum. For example, the average LPL employee would need to work 11 more years to make up the $132,200 she would have saved by working at the firm with the best-in-group rating.
The average rating for plans in the peer groups was about 90. The highest among the dozen firms we looked at was 85 and the lowest 74. Peer groups consisted of companies with similar demographic makeups, but not all firms in a peer group are in the same industry.
Take a look at the 11 Best & Worst Broker-Dealer 401(k) Plans for 2016:
11 (tie). JPMORGAN CHASE
Rating: 74
Highest in Peer Group: 91
Additional Years of Work: 12
Lost Savings: N/A ($53,200 in 2015)
Plan Assets: $20.8 billion
Average Account Balance: $76,000
11 (tie). LADENBURG THALMANN
Rating: 74
Highest in Peer Group: 92
Additional Years of Work: 13
Lost Savings: $41,500
Plan Assets: $19.6 million
Average Account Balance: $83,000
9. LPL FINANCIAL
Rating: 75
Highest in Peer Group: 91
Additional Years of Work: 11
Lost Savings: $132,200
Plan Assets: $171 million
Average Account Balance: $46,000
8. RAYMOND JAMES
Rating: 76
Highest in Peer Group: 90
Additional Years of Work: 9
Lost Savings: $82,000
Plan Assets: $720 million
Average Account Balance: $71,000
7. STIFEL FINANCIAL CORP.
Rating: 78
Highest in Peer Group: 93
Additional Years of Work: 11
Lost Savings: $128,200
Plan Assets: $764 million
Average Account Balance: $110,000
