Defined contribution advisors are unique in the financial advisor community. See how their preferences and priorities further differ based on their DC assets under advisement (AUA) and type of DC compensation.
Advisors who sell defined contribution (DC) plans and services, and consult on DC investment menus, represent a unique subset of the financial advisor community. Even within this universe — advisors who “play” in the DC space — there are subtle distinctions among practices.
This research examines advisors based on their DC assets under advisement (AUA) and the way they are compensated for their DC business (fees and/or commissions). It looks at their preferences and requirements for investment platforms and services, what they look for in provider partners, and how they evaluate funds for their DC clients, offering important insights for providers who are looking to partner or deepen their relationships with this critical audience — which represents a “gateway” to DC plan sales and clients.
- Interest in specialty investments and asset is relatively low.
- Open-architecture platforms are most frequently used, but many advisors also utilize other platforms on occasion.
- There is a place for group annuities (GAs) in DC plans.
- Advisors highly value themselves, sponsors, and participants.
- Advisors with very large DC practices rely less on provider tools.
- “16” is the magic number when it comes to the ideal number of funds in a DC plan.