A subtle power shift in the advisor-sold DC market will change the industry’s landscape forever, writes NAPA Net editor in chief Fred Barstein in the latest issue of NAPA Net the Magazine. In the past, record keepers in the advisor-sold space did well because they were focused on one market segment and were able to effectively wholesale to “blind squirrels.” But in the future, Barstein notes, the winners (a.k.a. the survivors) will have to be able to sell to the small and mid-to-large DC markets while shifting their sales focus to experienced plan advisors.
“Those DCIOs now relegated to sitting in the back seat will not only be sitting in the front seat, but will be acting as the engine of growth for advisors,” Barstein predicts. DCIOs that don’t own a record keeper or have a viable TDF strategy will need to either own or work together to create either customized managed investment products or risk management solutions. “That will become the engine and the GPS system, so to speak.”
So is the sky falling for advisor-sold record keepers? For those unwilling to change, the answer is yes, Barstein believes. But for record keepers that have multimarket strategies and are willing to enable elite advisors and teams to step back a bit (which also means wholesaling to them much differently), “it’s nothing but blue sky,” Barstein asserts — especially since there will be less competition.
Read Barstein’s entire “Inside the Marketplace” column here; a pdf of the entire 64-page spring issue of NAPA Net the Magazine is here.
