Market analysis agency Cerulli Associates predicts that monetary advisors will play a good greater position within the outlined contribution plan market because the trade is ready to see progress in micro 401(ok) plans, these with lower than $5 million in property.
Cerulli performed a web-based survey of 24 DC recordkeepers within the third and fourth quarters of 2024 for its “U.S. Retirement Market 2024” report. It discovered that 57% of these recordkeepers stated between 50% and 99% of DC plans had been already being offered by way of advisors.
Nonetheless, there’s an expectation that the variety of micro DC plans will develop from roughly 600,000 at this time to over 1,000,000 in a decade, spurred by SECURE 2.0 tax incentives and state-sponsored retirement plan applications. That is more likely to result in higher involvement from monetary advisors in promoting these plans to their present purchasers. For instance, 83% of surveyed recordkeepers stated the share of wealth advisors or non-specialist plan advisor corporations available in the market will improve over the subsequent three years.
“I feel advisors can capitalize on the prevailing wealth administration relationships they’ve with small enterprise proprietor purchasers to promote plans to these already present purchasers,” stated Elizabeth Chiffer, analysis analyst, retirement, with Cerulli and the lead writer on the report. “Additionally, in the event that they don’t have already got relationships with these plans by way of wealth administration [contacts], they could search to work with small enterprise homeowners to get them extra wealth administration purchasers. I feel advisors have all the time sort of labored on the smaller finish of the market. So, we count on that to proceed.”
A Cerulli survey of 401(ok) plan members discovered that 25% of those that work with a monetary advisor discovered them by way of their plan supplier or advisor.