Simply put, the data is unreliable and late. In many cases the Form 5500 is not available until 11 months after the year in which it applies. By that time, numerous changes could have occurred. In addition, the data on the IRS Form 5500 is unreliable and even if it is provided timely because it is often completed incorrectly by those responsible for the preparation. Finally, those plans which are required to file a Schedule C must include every code applicable to the expense paid by the plan. As a result, there is no consistency in the use of the codes to support reliability.

Bad data is typically associated with prospects or research reports. In other words, an advisor is entering data on a prospect or a potential prospect that is incomplete or even inaccurate. In addition, we spot check our database each quarter to determine if data in the system is incorrectly entered.

More importantly the question is, “is the user competent enough to know what fees they charge for the services they provide?” PLANbenchmark believes that a user knows this information. In addition, an advisor that is benchmarking a client account has access to the information necessary to produce an accurate benchmarking report.

Each month the data base is pulled down to evaluate each number entered into each service line under each category to determine if anything needs addressed.

Rank is calculated by looking at every row of data in our database for an Expense within a particular asset range. For example if there is 10 rows of data for Investment Management ranging from 1 - 10 and your fee was in position 8 you would be Rank 80.

The Universe is comprised of 3 things.

1. Plan Type
2. Asset Range
3. Expenses

We look at what Plan Type (e.g. 401k) the Plan you created is apart of. Then we look at the Asset Range (e.g. $1-$2.5M) for your Plan and lastly with the Expense (e.g. Investment Management) to see how many Plans are using that individual service. This number will likely be different than the Rank since we do not include duplicate values in our total.