Retirement plan advisors controlled 28 percent of the defined contribution market at the end of 2013, according to Cerulli Associates.
That figure is expected to grow if only because plan sponsors facing greater regulatory oversight are more frequently turning to advisors to manage plans.
"The market downturn highlighted the role of the DC plan and its replacement of defined benefit as the primary retirement savings vehicle for the vast majority of Americans," Bing Waldert, director at Cerulli, said. "Given the heightened scrutiny of retirement plans, a class of advisors and consultants who specialize in retirement plans and employee benefits has risen in prominence."
Because many advisors may also practice within the areas of wealth management and employee benefits, the Boston-based firm said asset managers working with DC plans are better off seeking out advisors who specialize in retirement plans.
It can be tough to identify these advisor specialists, it said, because it's not a hard-and-fast dividing line between specialists and those who simply take on DC plans as part o their practices.
According to Cerulli, different firms define specialists according to different criteria that can include "assets under management, revenue, marketing efforts, and time allocation." One firm, for instance, might classify an advisor as a specialist if more than 50 percent of AUM are retirement plans; another might look for either 60 percent of marketing or 50 percent of revenue dedicated to retirement plans.
In one way or another, however, advisors are considered specialists if 50 percent or more of the metric chosen by the asset manager as the defining factor is devoted to retirement plans.
So how many retirement plan advisors are there? Cerulli estimated about "4,000 advisory practices, employing more than 13,000 advisors, who receive more than 50 percent of their compensation from DC."
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