For years, the common belief was that wealth management drove the DC industry, while corporate and individual retirement plans were just a nice niche to maybe round out the portfolio. But since the Great Recession, the opposite has been true, notes Fred Barstein in his most recent “Inside the Marketplace” column in NAPA Net the Magazine.
Quoting Marshall McLuhan, who said, “the fish will be the last to discover water,” Barstein writes that younger advisors were quick to notice the remarkable growth in DC advisory practices, and to shift their focuses to meet their clients’ evolving needs. According to Barstein, around 90% of all advisors now service a DC plan, and nearly 10% of plan advisors now manage at least $25 million in DC plan assets.
Barstein highlights two advisors who have switched from a wealth management focus to a DC one, which can provide more business in significantly less time. Where it used to take 18 months to build a wealth management client, an advisor can close on a DC plan in a little over three weeks.
The bottom line: Advisors who don’t begin focusing on DC management risk getting shut out of the industry. “Wealth management advisors without a DC strategy risk losing those clients to the advisor managing their DC plan,” Barstein writes. “DC advisors without a wealth management strategy, or even plans to move towards a ‘four corners’ practice including health care and P&C, are missing an incredible opportunity.”
To read Barstein’s column in the Winter issue of NAPA Net the Magazine, click here. To download the entire 68-page issue, click here.
