Products March 26, 2012

Competition High in RIA Channel

Competition for asset managers is fierce in the registered investment adviser (RIA) channel. 
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Fewer than 1,500 of the more than 16,500 firms in the channel manage 90% of the assets, resulting in a short list of frequently targeted firms, according to research from Cerulli Associates.

Assets have consolidated in the RIA segment, causing the asset management distribution process, adviser portfolios and product demands to evolve.

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“More than 80% of RIA firms fall below the $100 million asset threshold used by many asset management distributors to justify sales focus,” said Scott Smith, head of Cerulli’s intermediary practice. “Asset managers searching for untapped markets will be unimpressed with the lack of assets at the lower tier of the RIA market.”

Cerulli’s research also found that although assets grew 16.6% from year-end 2009 to year-end 2010, the number of firms in the RIA space actually fell 1.1%. Rather than a sign of slowing growth in the channel, Cerulli analysts think this represents a beneficial maturation in the channel as less successful firms left the industry, and incoming advisers increasingly chose to join existing practices instead of starting their own.

Cerulli predicts there will be a continued increase in asset growth as larger RIA practices target advisers in the wirehouse and regional channels who want increased independence without the complications of starting a small business.

This research is from “Cerulli Special Quantitative Update: Registered Investment Advisor Market.” For more information on the report, contact CAmarketing@cerulli.com.

Products March 26, 2012

BofA Launches Small-Business 401(k)

Bank of America introduced a 401(k) solution from Merrill Edge designed for small businesses.
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According to Bank of America, the Merrill Edge Small Business 401(k) offers small-business owners, who generally have 401(k) plan assets of less than $250,000, an easy-to-manage retirement plan with lower costs than many traditional 401(k) plans.

The Merrill Edge Small Business 401(k) is self-serviced and managed completely online. Additional features and benefits include:

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  • A flexible 401(k) plan;
  • Access to 401(k) specialists to help with online plan set up;
  • Web-based 401(k) recordkeeping administration services tailored for small businesses provided by Plan Administrators, Inc.;
  • Transparent fees to help quickly assess the right plan for their business and control the bottom line; and
  • A streamlined investment menu selected by Morningstar Associates, LLC, who assumes investment fiduciary responsibility and simplifies the fund selection process for clients.

This solution also gives employees a platform where they can manage their retirement investments. Features include:

  • Online resources and education to help employees start their retirement investing and then stay on track, as well as phone-based support from 401(k) specialists to help them make informed investment decisions and
  • Access to daily online statements and account performance details.

“Merrill Edge Small Business 401(k) gives small-business owners and their employees access to benefits of the Merrill Edge services,” said Alok Prasad, head of Merrill Edge for Bank of America. “Merrill Edge’s simplified and transparent features enable customers to efficiently manage all their investment and retirement accounts, helping them prepare for the years ahead.”

 
 

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