DC National Record Keepers

Record keepers are perhaps in the strongest position of all providers, since they control the technology and, perhaps more importantly, the data that run DC plans. However, consolidation continues to affect this segment of the market, leaving more power in the hands of fewer record keepers.

There are basically three target market segments for record keepers:

1. Micro plans — those focused on plans under $1 million payroll companies and pure play or outsourcing record keepers
2. Mega plans — those over $500 million
3. Advisor-sold plans

The advisor-sold record keeper market is arguably the most dynamic, with providers having to service plans as small as $1 million (some even do start-ups), up to very large plans. Making it even more difficult, not only must these record keepers service the DC plans, but they also have to sell to and service all types of advisors, ranging from:

1. “Emerging” advisors, which include accommodators and advisors with less than $25 million DC AUM
2. “Core” advisors — those with $25 million to $250 million DC AUM
3. “Elite” advisors — with more than $250 million in DC AUM

Arguably, record keepers in the advisor-sold category which serve only small plans and Emerging advisors have no future, while mid-sized and larger plan record keepers serving primarily Elite advisors have no foundation. More and more, savvy advisors are looking for record keepers that can not only service all market segments, but are also willing and able to create private label MEPs or custom platforms.

The cost of entry and success remains high. These advisor-sold record keepers have to have at least two distinct sales forces, as well as relationship managers servicing BDs. They also need to invest heavily in technology just to keep up, let alone innovate.

Consolidation is forcing everyone to get bigger fast. In recent months we’ve seen significant industry shifts like those by Empower (Great-West, Putnam and JP Morgan), Transamerica (Diversified and Mercer), MassMutual (The Hartford), John Hancock (NY Life) and One America (BMO). Smaller firms like Verisight (Daily Access and Newport Group) and Alerus (ABG MN) have also stepped up, as have private equity firms, one of which recently bought Ascensus. Still to be settled: Will the new crop of “robo” record keepers fare better than their brethren did when the Internet emerged in the late 1990s? Stay tuned.

Our list of recordkeepers below was last updated in December 2015.

RK's 40SmallMidLargeMegaDistrSvc Model
ADPyybothbundled
Alliance Benefit Groupybothbundled
American Fundsyadvisorboth
Ameritasyadvisorboth
Ascensusyadvisorbundled
ASPireyadvisorunbundled
BPASybothbundled
Cuna Mutual Retirementybothbundled
Empower-Retirementyyyybothboth
Fidelityyyyybothbundled
Guardianyadvisorboth
Hewittyydirectbundled
John Hancockyyyadvisorboth
KTradeyyadvisorbundled
Lincolnyyadvisorboth
MassMutualyyyadvisorboth
Merrill Lynchyyybothbundled
Millimanyybothboth
Mutual of Americaydirectbundled
Mutual of Omahayadvisorboth
Nationwideyadvisorboth
OneAmericayyyadvisorboth
Paiyadvisorbundled
Paychexybothbundled
Pentegraydirectboth
Principalyyyadvisorboth
Prudentialyyadvisorbundled
Schwabyydirectbundled
Securianyyadvisorboth
Standardyyadvisorboth
T Roweyyyybothbundled
Transamericayyyadvisorboth
Ubiquityybothbundled
Unifiyadvisorbundled
Vanguardyyyydirectbundled
Verisightyybothboth
Voyayyyybothboth
Wells Fargoyyyybothbundled
Xeroxydirectbundled

 

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