September 28, 2009
--- Forty-one percent of defined contribution assets are controlled by
consultants, with the majority of these assets in large plans with more
than $500 million in assets, according to Cerulli Associates. ---
Cerulli anticipates that figure should continue to increase as plan sponsors look to augment the fiduciary skill associated with their plans, and demand best-of-breed managers and custom target-date funds. According to the third quarter issue of The Cerulli Edge—Retirement Edition, there has been a continued shift by consultants of client assets into alternatives and long-duration fixed income, as more than three-quarters of consultants said they desire a consistent investment performance track record and no surprises.
In a press release about the report, Cerulli said institutional investment consultants have become a critical avenue for asset managers hoping to distribute through a 401(k) platform. The report suggested asset managers should develop the role of the portfolio specialist, as consultants respond positively to this role, and 57% of consultants feel access to a portfolio manager is very important.
"By understanding how investment consultants operate and effectively meeting their demands, managers can be best poised to take part in custom target-date funds and open-architecture DC platforms," Cerulli said.
The report can be purchased at www.cerulli.com.
Rebecca Moore