According to new Fidelity research, 91% of advisors currently offering retirement plans, such as 401(k)s and 403(b)s, are only accommodating the business as part of their broader wealth management practices.
This presents a range of challenges, with many "accommodators" reporting that it is difficult to keep up with fiduciary rules, build scale and grow relationships.
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The research also identified a group of "High-Performing Retirement Advisors," who have made the shift from accommodating retirement plans to accelerating their retirement business by applying a deliberate approach to growth. These advisors have increased their retirement plan business by 50% or more in the last five years.
Meg Kelleher, executive vice president and head of the Retirement Advisors and Recordkeepers segment, Fidelity Institutional Wealth Services, said: "Retirement planning is not an accommodators’ business for the long-term – advisors who expect to only accommodate plans will not be able to compete with those who are dedicating real time and resources to it.
"Fidelity’s new offering helps RIAs with only a handful of retirement plan clients understand the real opportunity they present and helps get them on the path to accelerating their retirement business."
For RIAs, the opportunity with retirement plans continues to grow, and for those already involved, it is a bullish market. Eighty-four percent of plan sponsors relied on advisors in 2013 (up 9 percentage points from 2012), and 60% of High-Performing Retirement Advisors expect to at least double their retirement business in the next five years.
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By GlobalDataFidelity Institutional Wealth Services has also announced Retirement Plan Growth Strategies, a new program to help RIAs accelerate growth in their retirement plan business through consulting, tools and connections to the right resources.
The Fidelity program helps RIAs capitalize on the opportunity with retirement plans – specifically, how their fee-based model, fiduciary experience and investing acumen puts them in a unique position to grow this part of their practice.
