Among the report's additional findings:
- Asset managers are directing more resources and attention to the defined contribution investment-only (DCIO) market, target-date funds being a particular area of focus.
- The DC market is shifting its focus from stand-alone investment decisions to plan wellness. As a result, worksite advisors are increasingly emphasizing DC plan health and employee-participants' ability to retire.
- To secure more business, DC plan record-keepers and asset managers should establish robust incentive programs to reward lead-sharing between retail and DCIO-specific sales forces.
- Third-party administrators struggling to increase revenue should explore partnership, especially with independent broker-dealers.
- "Rich opportunities" exist for retirement plan advisors in the 403(b) plan market. This is a result of Internal revenue code changes that made the plans —tax-advantaged retirement vehicles used by educational institutions, non-profits, hospital service organizations and self-employed ministers—more like private sector 401(k) plans.
"Consultants reported a significant uptick in activity in the 403(b) space, where plans are transitioning from a multi-vendor to single-vendor relationship," the report states. "Some asset managers will benefit from this consolidation, as the number of investment options available on the participant investment menu drops…"
