The mid-year update of NAPA Net’s list of record keepers is complete, and we’ve updated both the list and the accompanying commentary.
While the number of record keeper deals this year has been relatively low, the deals have been significant nonetheless: John Hancock closed on their purchase of NY Life’s retirement division; OneAmerica is set to buy BMO’s retirement group; and Ascensus’ PE owner announced it would be for sale.
The inevitable DC record keeper consolidation is happening. The stakes are getting higher, with costs of distribution and technology increasing even as prices remain under pressure due to increasingly savvy plan sponsors, aggressive plan advisors and heightened regulatory scrutiny. While new pricing for plans that go to market may be more than reasonable, almost every record keeper has a high percentage of plans that, if rebid, would result in lower costs.
Experienced advisors are finally starting to winnow down the number of record keepers they work with and consolidating their current book of business. Which of the remaining national record keepers can sustain the arms race of increasing costs while prices and profits continue to decline in a very competitive market? Will any of the current regional players be able to take advantage of the opportunity?
Here are some highlights of developments over the first half of 2015:
- Ascensus — who’s willing to step up and pay what is rumored to be a steep price?
- BPAS — completed the acquisition of a smaller TPA record keeper after buying their DB practice.
- DST — Opened up a record keeper division to sell to the micro market through advisors led by Art Creel, who most recently headed up John Hancock’s sales division. And they just picked up retirement plan rollover specialist Wealth Management Systems, Inc. (WMSI).
- John Hancock — Completed its acquisition of NY Life’s retirement division and set up a separate mid and large market sales force under Jim Brockleman (late of Putnam), who reports to Pat Murphy (from NY Life), who now leads Hancock’s sales group.
- OneAmerica — in the process of purchasing BMO’s retirement group.
- Voya — hired industry vet Charlie Nelson, who grew Great-West into a major force, leading to the creation of Empower-Retirement.
Our newly updated list of record keepers is now online here — joining our recently updated lists of broker dealers and DCIOs. And look for our announcement of NAPA’s 2015 Top 50 Plan Advisors Under 40 — a.k.a. the “Young Guns” — in tomorrow’s Daily.
