Sponsors of 401(k) plans are less satisfied by the efforts ofservice providers, making those plan decision-makers less loyal toincumbents and less likely to promote their services.

Chatham Partners, a Waltham, Massachusetts-based researchanalyst for the financial services and retirement plan industry,surveys 11,000 plan sponsors annually and gaugestheir satisfaction with service providers based on aproprietary algorithm.

This year, 57 percent of those sponsors say they are loyal totheir service provider, a decrease of 6 percent from last year.

And 15 percent qualified their relationship with serviceproviders as “at risk,” up from 13 percent last year.

That decline in loyalty translates to whether or not sponsorswould be willing to endorse their service provider. Chatham’s datashows that 60 percent of sponsors could be considered as“promoters” of their relationship with service providers, a numberthat has also declined 6 percent from last year.

But 12 percent would qualify as “detractors,” up from 9 percentlast year. That means of the 11,000 sponsors surveyed by Chatham,more than 1,300 not only question their service provider's value,but are willing to articulate it if asked.

Satisfaction levels dropped across 10 specific areas of serviceproviders’ responsibilities. Less than three-quarters (73 percent)of sponsors say they get “high quality service.”

That may not seem like a bad result, but considering it is a 12percent drop from just last year, the data reflects what could be ahigher level of scrutiny placed onservice providers’ efforts.

Also, only 68 percent of sponsors said their service provider“reduces their administrative burden,” down 11 percent from lastyear.

Fewer sponsors said their service providers actually offersolutions to meet plan objectives and goals, and slightly fewer (77percent) said service providers help with fulfilling fiduciaryobligations.

Pete Starr, Chatham’s CEO, said the overall decline in sponsorloyalty suggests intensified expectations, as sponsors face morefinancial and regulatory pressures and are increasingly reliant onservice providers.

“It has become evident that the increasing pressures beingplaced on meeting plan goals is changing the conversation on howproviders are evaluated, said Starr in a company release.

“Providers are being asked to provide more value enabled byincreasingly sophisticated technology at lower margins,” headded.