Garnering an outsize market share: retirement specialists

The Cerulli survey also reports these findings:

• Greater than half of defined contribution investment-only (DCIO) assets reside in internally managed mutual funds, followed by collective trusts and institutional separate accounts. 

• 48 percent of asset managers, broker-dealers and life insurers have launched a new retirement income product within the last year.

• 80 percent of asset managers offer non-revenue-sharing fund share classes. "Revenue sharing as a topic will continue to be hotly debated; however, Cerulli believes that asset managers that offer plan sponsors the flexibility to choose from various non-revenue-sharing share classes (e.g., a non-revenue-sharing share class with sub-TA fees or a zero-zero share class) will be best positioned with the broadest opportunity set," the report states.

• Cerulli projects that by year-end 2015, DC plan participants will direct almost half of all 401(k) contributions into target-date mutual funds that automatically reset the asset mix of stocks, bonds and cash equivalents in a portfolio according to a selected time frame that is appropriate for an investor.

• Record-keepers express the most interest in increasing DC staff in external-facing roles. Two-thirds of respondents (67 percent) plan to add resources in relationship management. And 61 percent plan to add resources in external sales. "The record-keeper business is fairly commoditized, which makes the client experience a significant opportunity for differentiation from competitors," the report notes.

• Three-quarters of non-producing third-party administrators (TPAs) — those who do not offer investment management services — consider the record-keeper's ability to generate referrals for sales leads as the most important quality when selecting record-keeper partners.

• A plurality of TPAs anticipates that demand for ERISA 3(16) plan administration services will increase due to an increasingly onerous regulatory environment.