Despite the fact that there are thousands of broker dealers and advisory firms — hundreds of which have 250 or more registered reps — fewer than 40 of them are focused on the DC market (defined as having at least one person dedicated to supporting DC-focused advisors). That level of support varies widely by firm.
The broker dealers and advisory firms that make up the following list compiled by The Retirement Advisor University (TRAU) fall into four categories:
• Employee — i.e., reps are employees of the firm (this includes wirehouses)
• Independent — reps are not employees
• Insurance — firm is part of an insurance company
• Specialty — firm or a division focuses almost exclusively on the DC market
With 408(b)(2) disclosure requiring advisors to declare whether they are acting in a fiduciary capacity, many firms are waking up to the realities of the DC market and are reluctant to allow their reps to be ERISA plan fiduciaries. Consolidation will continue even among the so-called “focused” firms — as evidenced by the acquisition of Morgan Keegan by Raymond James. DC focused advisors will gravitate to firms that understand and support their business and some are leaving broker dealers — letting their licenses lapse — to become pure RIAs, clearing and trading through firms like Schwab, Fidelity and TD Ameritrade.
Click here for a pdf of this table.
