Podcast Center
Video Center
Webcasts
Resource Center
Events
July 06, 2011 at 01:22 PM
Retirement plan providers’ revenues are being stressed by intense scrutiny from regulators and legislators, a report released Wednesday by the Financial Research Corp. found. Continued scrutiny over fees and defined-contribution plan outcomes has put pressure on revenues and “will shape the future of the DC retirement plan market.”
“Overall, we believe that plan-level profits are likely to be squeezed across most stakeholders,” Leslie Prescott, author of the FRC study, said in a statement. “Prospects for growth exist for firms that understand the current market dynamics and position their organization to take advantage of these developments.”
Prescott noted that government regulations have a “profound and varied” affect on retirement plans.
“Currently, as a result of impending fee disclosure requirements, as well as high-profile press coverage and evolving economics, plan sponsors are focusing on total plan costs and how they can be reduced,” Prescott added. “Enhanced fee information is becoming available to plan participants and there is heightening competition among record keepers of all types and sizes.”
FRC analyzed data from BrightScope’s retirement plan database and found the average participant-paid costs as a percentage of assets for the smallest plan groups was more than three times those of the largest plans.
