October 2014, BOSTON. Total private defined contribution (DC) assets climbed to $4.7 trillion in 2013, of which $1 trillion was advisor-sold, according to new research from global analytics firm Cerulli Associates.
"Private DC assets have benefitted from strong equity market performance, and an increased focus on improving plan participant ratios and the participant's ability to retire," Jessica Sclafani, senior analyst at Cerulli. "The implementation of auto-features, such as autoenrollment and autoescalation, has also helped drive assets into the industry."
Cerulli's latest report, State of DCIO 2014: The Emerging Role of the Specialist Advisor, is a special report focused on the investment-only or non-recordkeeping segment of the DC market. The report provides analyses of opportunities in DC plan asset management and distribution, and is designed as a business planning tool.
"As the DC market continues to evolve, it is becoming more heterogeneous in that plan designs and asset allocations can vary widely depending on a plan's overall asset size and the involvement of advisors and consultants," Sclafani explains.
"The DC industry is slowly turning away from standalone investment decisions to total plan wellness," Sclafani continues. "As part of this shift, a large part of the advisor's or consultant's proposed value-add in the DC space is specific to improving overall plan health and the participant's ability to retire. More time and attention is now directed toward increasing participation ratios and deferral rates."
Cerulli warns that DC providers must be cognizant of the plan segment in which they are operating to be successful.