advisor-driven retirement market: profiling the top retirement advisors
TRANSCRIPT
Frank Polefrone Senior Vice President,
Access Data, a Broadridge Company
Advisor-Driven Retirement Market Profiling The Top Retirement Advisors
November 5, 2013
2
• Advisor Driven Retirement Market
• The Data Challenge
• Independent Retirement Platforms
• Distributors
• Advisor Insights
Agenda
Retirement Market Landscape
4
Advisor-Driven – Retirement Market Landscape
DC Assets seeing highest growth rate
Advisors driving plan growth
Top 20 Independent
Recordkeepers
Wirehouse Independent B/D’s & RIAs
Investment Only Fund
Firms
5
55% of $5.1 Trillion of DC
is Advisor Driven Business
6
Advisor Driven Retirement Assets
= $2.8 Trillion
7
Total Assets
$2.8
Advisor Sold
DC Plans 446K Advisor Sold
DC Participants 49M
Independents
$1.6T
$1.2T Schwab/Fidelity
8
446K employers with
49M participants
• Primarily Transaction Oriented Employee Base
The data challenge
9
5K BDs with 500K RRs
14K RIAs
10
The Data Challenge
• Complex distribution model
• Increased regulatory requirements
• Revenue sharing requirements
• Lack of transparency and market information
• Difficulty identifying and influencing retirement specialists
Advisor Driven Retirement
Top Platforms
12
Advisor Driven Retirement Platforms
Source: Retirement Plan Sponsor Survey
Supermarket & Fund Platforms
1.6 Trillion
Rank Company Assets Plans
1 Fidelity 1,096,623 32,293
2 Prudential 199,488 5,145
3 Charles Schwab 109,363 1,164
4 Ascensus 41,973 41,338
5 ADP 40,473 35,384
6 American Funds 37,648 34,686
7 The Newport Grp. 23,422 2,261
8 CUNA Mutual/CPI 11,315 6,214
9 Daily Access 8,050 1,595
10 Aspire Financial 5,637 6,056
Insurance Platforms
1.1 Trillion
Rank Company Assets Plans
1 ING 301,720 47,718
2 Great West 178,166 27,266
3 Principal 136,987 47,857
4 MassMutual 104,318 37,159
5 Transamerica 82,292 20,345
6 Nationwide 79,161 40,698
7 John Hancock 71,105 44,620
8 Lincoln 48,940 23,429
9 New York Life 32,595 1,650
10 OneAmerica 18,100 9,700
13
DC Assets by Platform Type
$425
$1,053
$1,206
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Mutual Fund Platform Insurance Platforms Supermarket Fund Platforms
DC Assets ($B)
Source: Plan Sponsor Survey
14
DC Plans by Platform Type
132,679
300,442
33,457
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Mutual Fund Platform Insurance Platforms Supermarket Fund Platforms
Number of Plans
Source: Plan Sponsor Survey
15
DC Participants by Platform Type
8.98
19.10
17.10
-
2
4
6
8
10
12
14
16
18
20
Mutual Fund Platform Insurance Platforms Supermarket Fund Platforms
Number of Participants (M)
Source: Plan Sponsor Survey
16
Advisor Driven Retirement Platforms
Source: Retirement Plan Sponsor Survey
Small Plans
Rank Company $1MM -
$10MM % Share
1 Fidelity 49,349 9.2%
2 John Hancock 47,908 9.0%
3 Great West 40,202 7.5%
4 Principal 35,220 6.6%
5 ING 35,177 6.6%
6 MassMutual 33,911 6.3%
7 TIAA-CREF 23,430 4.4%
8 Nationwide 23,018 4.3%
9 Ascensus 22,016 4.1%
10 American Funds 20,838 3.9%
Mid Plans
Rank Company $10MM -
$50MM % Share
1 Fidelity 85,480 15.5%
2 TIAA-CREF 48,143 8.7%
3 Great West 32,672 5.9%
4 Principal 32,110 5.8%
5 Wells Fargo 26,334 4.8%
6 ING 25,750 4.7%
7 Prudential 24,527 4.4%
8 MassMutual 23,969 4.3%
9 Vanguard 19,768 3.6%
10 Transamerica 19,032 3.4%
Distributors Selling DC Plans
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Proportion of 401(k) Producers – 2012
52%
Don’t Sell
401(k)
48%
Sell 401(k)
39%
31%
53%
62%
45%
RIA
Bank
Independent
Regional
National
BASE = All Advisors
/ = Significant change from 20111 t0 2012
Source: Cogent Research, Retirement Plan Advisor Brandscape ® 2012
19
401(k) AUM by Producer Level
44%
25%
49% 52%
66%
42%
39%
52%
43% 33%
23%
33%
18% 23%
8% 15% 11%
25%
0%
20%
40%
60%
80%
100%
Total National Regional Independent Bank RIA
Light Moderate Heavy
BASE = Advisors with 5%+ AUM in 401(K) Plans
/ = Significant change from 20111 t0 2012
Source: Cogent Research, Retirement Plan Advisor Brandscape ® 2012
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Market Distribution of Advisors
* Source: Cogent Research, Retirement Plan Advisor Brandscape ® 2012
With 5% or more in 401(k) AUM*
Independent 43%
National 28%
Regional 14%
RIA 12%
Bank 4%
21
401(k) Asset Allocation: Bundled Vs. Unbundled
42% 34%
40% 46%
20%
61%
58% 66%
60% 54%
80%
39%
0%
20%
40%
60%
80%
100%
Total National Regional Independent Bank RIA
Unbundled Bundled
BASE = Advisors with 5%+ AUM in 401(K) Plans
Source: Cogent Research, Retirement Plan Advisor Brandscape ® 2012
22
Distributors of Advisor Sold DC Plans
3,799 3,986
58,173
18,523
-
10,000
20,000
30,000
40,000
50,000
60,000
Banks and Trust Companies
Registered Investment Advisors
Advisors at Independent/ Regional BDs
Advisors at Wirehouse/National
Source: Access Data, a Broadridge Company
Advisors Selling DC Plans
24
Advisors Selling DC Plans
85,486
67,358
18,128
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Total Advisors Selling DC Plans
Advisors on One Platform Advisors on Multiple Platforms
Source: Access Data, a Broadridge Company
25
Dually Registered Advisors
50,031
40,501
9,530
-
10,000
20,000
30,000
40,000
50,000
60,000
Total Dually Registered Advisors Selling DC Plans
Dually Registered Advisors - One Platform
Dually Registered Advisors - Multiple Platforms
Selling DC Plans
Source: Access Data, a Broadridge Company
26
Advisors Selling DC Plans
85%
92%
58%
15%
8%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Advisors Selling DC Plans
Advisors on One Platform Advisors on Multiple Platforms
Insurance Platform
Mutual Fund Platform
Source: Access Data, a Broadridge Company
27
Dully Registered Advisors
81%
90%
62%
19%
10%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Dually Registered Advisors Selling DC Plans
Dually Registered Advisors – One Platform
Dually Registered Advisors – Multiple Platforms
Insurance Platform
Mutual Fund Platform
Source: Access Data, a Broadridge Company
28
Top Advisors by Number of Platforms
3.68
2.2
1.3
-
1
2
3
4
Heavy Users Moderate Users Total Advisors
(Average Number)
Source: Access Data, a Broadridge Company
29
Retirement Specialists – Number of Platforms
13,170
3,377
1,109
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Moderate Users Heavy Users Retirement Specialists
Retirement Specialists Use 4+ Platforms
Source: Access Data, a Broadridge Company
30
Advisor Driven Business Expected to Grow
$2.5 $2.8 $3.0 $3.2 $3.5 $3.7 $3.9 $4.1
$2.1 $2.3
$2.4 $2.5
$2.5 $2.6
$2.6 $2.6
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
2011E 2012E 2013P 2014P 2015P 2016P 2017P 2018P
DC Assets: Investment Only vs. Proprietary ($T)
Investment Only Proprietary
Source: Simfund Pro, 7.0 / Access Data, a Broadridge Company
55%
45%
62%
38%
31
20+, 16%
10-19, 24%
5-9, 25%
1-4, 35%
Currently Manage in 2012
Average Number of 401(k)s Managed per Year
BASE = Advisors with 5%+ AUM in 401(K) Plans
Source: Cogent Research, Retirement Plan Advisor Brandscape ® 2012
20+, 24%
10-19, 25%
5-9, 28%
1-4, 23%
Anticipate in 2013
32
• Use data to segment and service
• Focus on retirement specialists
• Use data to identify best prospects
• Partner with distributors and access points
• Service small to medium plans
• Leverage multi-channel communications, engaging content and education to support advisors
Strategies for Driving Growth
Advisor Support Marketing Participant Comms
Wrap Up & Discussion