Professionally managed assets reached a total of $36.8 trillionin 2013, gaining 10.9 percent over 2012.

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That’s according to new research from Cerulli Associates, whichsaid that institutional client assets increased at approximatelythe same rate, at 10.6 percent, as retail assets, at 10.9 percent,in the past year. Institutional client assets actually grew over a10-year period at a higher rate (5.5 percent) than retail assets(4.8 percent).

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Cerulli also said that institutional client asset growth hasbeen driven not just by market appreciation but also by growth indefined contribution assets. From 2009 through 2013, DC assets grewat a compound annual growth rate (CAGR), of 11 percent. Inaddition, the opening of newer institutional channels, such asinsurance general accounts, and asset managers’ targeting of majorglobal asset pools, also drove growth.

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In institutional channels, 401(k) plans, fueled by market appreciation and thecontinued addition of automatic features, have grown to be thelargest distribution channel, when considered by professionallymanaged assets; 401(k)s held $3.9 trillion in assets.

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Cerulli classified defined contribution plans as opportunities,in part because 2013 saw a continued movement away from proprietaryfunds and those associated with plan recordkeepers. That means thatplan sponsors are faced with a broader array of choices from anincreasing field of providers. At the same time, plan fiduciariesare not content with the higher risk entailed in using proprietaryproducts and may also be encouraged by an advisor or consultant toseek out nonproprietary “best of breed” funds.

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Challenges and risks, said Cerulli, include boomers, who are“the greatest threat to the DC market” as they retire and chooseeither rollovers that take assets from plans or start to drawassets from DC accounts. This was seen in the private DC market in 2013, the research continued,with net contributions turning negative for the first time.

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IRAs are also classed as challenges and risks,with the competition for rollover assets increasing, a broaderfield of competitors seeking to manage assets and new productsbeing developed to catch the attention of consumers.

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Within the DC market, Cerulli said, target-date funds canprovide opportunities for growth despite the maturation of themarket.

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