Retirement plan providers must grow and offer more services, Cerulli says

Current market dynamics favor 'an oligarchy of plan providers,' according to the report.
DEC 18, 2019
To remain profitable, retirement plan providers will have to become larger or more technologically savvy to grapple with ever-increasing fee pressure and increasing demands from plan sponsors and participants. That's the key finding of a report on U.S. retirement markets from Cerulli Associates, which said that plan providers must consider opportunities for growth — whether organic or through mergers and acquisitions — in addition to pursuing technological advancements that protect against cybersecurity threats, contribute to operational efficiency and facilitate client engagement. "These enhancements are essential to maintain a competitive edge," said Anastasia Krymkowski, associate director of retirement at Cerulli Associates. The report asserts that current market dynamics favor an oligarchy of retirement plan providers, supported by estimates that the 10 largest record keepers will represent more than 75% of record-kept 401(k) assets by the end of this year. [More: Consolidation alters RPA space]​ But mergers and acquisitions are only one approach to building out new capabilities, the report says. "In other cases, strategic partnerships better align with firms' objectives and respective strengths," Ms. Krymkowski said. "Whether through acquisitions or strategic partnerships, retirement-focused firms that are lacking the capabilities to provide comprehensive financial guidance should consider their role in supporting plan sponsors and participants. They should also evaluate the potential to expand their purview into more holistic and higher-margin lines of business such as fiduciary services and managed accounts." [Recommended video: Advisers with few retirement plan clients should seek help from partners]

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.