Record keepers with identical advocacy scores are experiencing sharply different placement outcomes as retirement-plan advisors shift selection criteria from standalone capabilities to business-model alignment, according to NMG Consulting's annual study of nearly 600 advisors.

Two record keepers, each with a 77% advocacy score, saw their shares of top-three advisor relationships move in opposite directions between 2024 and 2025. One fell from approximately 30% to 22%, while the other rose from approximately 25% to 28%, the study found. The divergence occurred despite one record keeper holding leading service ratings and the other holding a leading digital experience.

Poor advisor service has emerged as the leading reason for not doing business with a record keeper, averaging 28% across providers, the study found. Fees were cited by 8% of advisors. Eighty percent of advisors identify pricing as a selection criterion, and 68% cite client service, but pricing failures only prevent shortlist inclusion while service failures eliminate providers from consideration, according to Joshua Dietch, partner at NMG Consulting.

The shift reflects an economic change in advisor compensation. Advisors once commonly received at least part of their compensation through record keepers, Dietch said. Specialists and hybrid advisors now more often receive compensation directly from plan sponsors. Record keepers increasingly influence the cost of running a practice through service problems that consume staff time, poor integration that creates work, and efficiency that creates capacity, he said.

Forty-three percent of advisors identify business development as an area where record keepers could better support them, the study found. Better connections between the record keeper, advisor, third-party administrator and client can reveal participant needs and plan opportunities, Dietch said.

Advisor priorities vary by business model. Eighty-nine percent of defined-contribution specialists expect revenue to increase over the next 12 to 24 months, but only 43% expect gross margins to improve, the study found. Nearly half of hybrid advisors want more business development support. Twenty-eight percent of wealth advisors cite ease of doing business as a selection criterion, compared with 13% of specialists.

Thirty-seven percent of advisors want greater support through dedicated contacts, the study found. Advisors want technology to simplify routine interactions and someone accountable when problems arise, Dietch said.