There is a necessity for adaptability, collaboration, and proactive strategies amid the changing landscape of retirement planning and wealth management. The landscape of retirement planning and wealth management is evolving, as outlined in recent insights from Cerulli’s retirement and wealth research. Defined contribution plans, especially 401(k)s, are experiencing substantial growth due to government mandates, tax credits, and pooled plans. While there’s optimism among institutional consultants regarding the retirement income market, Retirement Plan Advisor (RPA) aggregators present a different perspective. The number of RPA specialists has declined, but their assets have grown, indicating a shift toward serving larger plans. Dabblers, managing 15%-49% of revenue from DC plans, are growing, recognizing the value in diversifying revenue sources.
Non-specialists are maintaining their presence, but their assets see marginal growth. In the wealth advisory realm, incentivizing advisors to engage in more DC business involves cultivating wealth management clients from these plans and sourcing new DC plan clients. Technology, improved data access, simplified processes, training, and proactive home offices are identified as crucial elements for future success, as the three distinct worlds of wealth advisors, RPAs, and institutional consultants converge.
Read more in Fred Barstein’s Wealth Management column this week, “As the Number of 401(k) Plans Grows, Why Are RPAs Shrinking?”
