As broker/dealers actively encourage more and more of their advisors to lean into the retirement plan space, the latest Cerulli Edge—U.S. Asset and Wealth Management Edition says asset managers will need to adapt their approach to product distribution and advisor support in this evolving intermediary landscape.
Most top-tier asset managers have separate wholesaler teams dedicated to covering the defined contribution (DC) market, including B/D-based advisor practices that specialize in advising retirement plans. However, when it comes to “dabbler” and “nonproducer” retirement plan advisors, the report says the coverage areas between retail and DC wholesalers start to blur, adding a layer of logistical complexity to engaging and supporting these advisors.
Dabblers are advisors for whom 15%-49% of their AUA is with retirement plans and nonproducers are advisors for whom less than 15% of their AUA comes from retirement plans.
Dabblers are advisors for whom 15%-49% of their AUA is with retirement plans and nonproducers are advisors for whom less than 15% of their AUA comes from retirement plans.
“Dabbler and nonproducer retirement plan advisors make up the majority of B/D-based retirement plan advisors and a meaningful portion of B/D advisor-sold DC assets,” said Shawn O’Brien, director. “However, some asset managers say their firm still employs a siloed approach to covering these advisors, with little communication between retail and DCIO wholesaler teams.”
Close to half of dabblers and nonproducers (44%) say if they received greater support cultivating wealth management clients from their DC business, they would be more inclined to pursue DC plan opportunities. Cerulli recommends asset managers’ distribution teams employ a collaborative coverage model to address these advisors who express an interest in improving or growing the retirement plan side of their businesses.
Additionally, having better sales tools to grow their DC businesses is a keen area of interest among 41% of nonspecialist retirement plan advisors.
“B/D-based advisors lean on asset managers for nonproduct-related tools, education, and strategic guidance that help them better serve their clients and grow their book of business,” O’Brien said. “By helping advisors improve and grow their practices, asset managers win advisors’ loyalty and trust, positioning themselves as strategic partners and laying the foundation for long-term, reciprocal relationships.”
These findings are from The Cerulli Edge—U.S. Asset and Wealth Management Edition, February 2024 Issue.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
