Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Asset Managers

Cerulli Sees Plan "Investment Only" Market Growing

Your article was successfully shared with the contacts you provided.

Money managers still have room to increase their share of the U.S. private defined contribution retirement plan “investment only” market, a research firm says.

The total amount of assets in 401(k) plans, money purchase plans, profit-sharing plans and individual 401(k) plans could increase to $4.3 trillion in 2014, from $3.3 trillion this year, according to Cerulli Associates, Boston.

Despite the effects of the financial crisis, defined contribution plan assets have increased from $2.6 trillion in 2008, and the investment only (IO) asset total has increased to about $2 trillion, from $1.5 trillion, the firm says.

IO assets will account for 60% of plan assets by the end of the year, up from 42% in 2003, the firm predicts.

Proprietary funds have about 45% of the private defined contribution plan assets, and employer stock has a 13% share.

About 99% of all plans have less than $100 million in assets, and most of those small plans use proprietary 401(k) platforms. Due to the emphasis on proprietary platforms at the small plans, proprietary funds hold 83% of total assets at the average small plan, Cerulli says.

The analysts say the best opportunity for IO managers lies in sales of custom target-date funds built for plans with more than $100 million in assets.



© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.