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

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

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.