Data & Research February 23, 2024

Asset Managers Should Adopt Holistic View of DC and Retail Markets

Asset managers can support defined contribution ‘dabbler’ and 'nonproducer’ advisers in managing their practices, Cerulli recommends.

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When evaluating broader distribution strategies, asset managers should adopt a holistic view of the defined contribution and retail investor markets, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.  

While top-tier asset managers have well-established wholesaler teams dedicated to the DC market specializing in retirement plan advising, a notable challenge arises with “dabbler” and “nonproducer” plan advisers. This subset, forming a significant portion of broker-dealer advisers and broker-dealer adviser-sold DC assets, blurs the coverage areas between retail and DC wholesalers, introducing a logistical complexity for engagement, according to the Boston-based firm.

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“Dabbler and nonproducer retirement plan advisers make up the majority of B/D-based retirement plan advisers and a meaningful portion of B/D adviser-sold DC assets,” Shawn O’Brien, director of retirement, said in a statement. “However, some asset managers say their firm still employs a siloed approach to covering these advisers, with little communication between retail and DCIO wholesaler teams.”

Cerulli’s research found that dabblers and nonproducers are more likely to offload their investment lineup responsibilities to their home office or a third party. When asked about the fiduciary status across dabblers’ DC assets under advisement as of year-end 2022, the answers showed low levels of in-house fiduciary coverage, with: ERISA 3(38) (14%), ERISA 3(21) (21%), non-fiduciary capacity (43%) and third-party fiduciary (21%). The split was similar for nonproducers across ERISA 3(38) (12%), ERISA 3(21) (12%), non-fiduciary capacity (51%) and third-party fiduciary (25%).

Nearly half of dabbler and nonproducer advisers (44%) expressed a willingness to explore DC plan opportunities if they receive enhanced support for cultivating wealth management clients from their DC business. Cerulli recommended that asset managers’ distribution teams adopt a collaborative coverage model to address the needs of these advisers, fostering growth in the retirement plan segment of their businesses.

Asset managers can employ different strategies to support advisers in managing their practices and expanding their client base, Cerulli suggested. Assistance can range from:

  • helping dabblers and nonproducers build prospect lists;
  • make introductions and enhance online presence; and
  • provide a more structured approach through frameworks or practice management solutions.

Alternatively, some asset managers can take a less formal route, sharing success stories from specialist advisers that showcase examples of how successful plan advisers approached practice initiatives.

“B/D-based advisers lean on asset managers for nonproduct-related tools, education, and strategic guidance that help them better serve their clients and grow their book of business,” O’Brien said. “By helping advisers improve and grow their practices, asset managers win advisers’ loyalty and trust, positioning themselves as strategic partners and laying the foundation for long-term, reciprocal relationships.”

Products February 22, 2024

Product & Service Launches – 2/22/24

Voya launches new supplemental health benefit to help with out-of-pocket costs; LifeYield releases Annuity Income Layer; and NAGDCA offers enhanced SECURE 2.0 Resource.

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Voya Expands Workplace Benefits Offerings with Health Insurance Supplement

Voya Financial Inc. launched a supplemental health benefit to help relieve out-of-pocket medical costs for workers.

Voya Protect is a Group Limited Benefit Insurance backed by the insurance technology company Ansel Health, the firm announced. The offering is a supplemental health option designed to pay benefits quickly and easily when covered conditions are diagnosed.

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“At Voya, we understand that an unexpected medical emergency can be costly. We also know that the ability to save for emergencies has remained a challenge given the realities of inflation over the past several years,” said Rob Grubka, CEO, workplace solutions, in a statement. “Even with health insurance coverage through their employer, it’s not uncommon for employees to still have out-of-pocket medical expenses — which can have a financial impact on workers and their families.”

The firm gave three product highlights for Voya Protect:

  • Extensive – Voya Protect pays benefits for more than 13,000 covered conditions, which are determined by International Classification of Diseases (ICD-10) diagnostic codes. There are also no limitations or exclusions for pre-existing conditions and no medical underwriting requirement.
  • Efficient – A covered individual can file a claim in minutes either online or by using the app, according to Voya. Eligible, approved benefit payments are typically made within 72 hours.
  • Easy – Administration is simple for employers with self-administered billing and a single certificate that can be distributed or posted for In many cases, Voya will be able to automatically pay customer claims when an event occurs via integration with medical claims data. In addition, Voya Protect is compatible with health savings accounts.

Voya Protect also offers employers additional optional benefits they can elect for their employees. These include optional benefit coverage for mental health conditions, such as anxiety, bipolar disorder and major depressive disorder.

The firm noted that more workplace benefit solutions are planned throughout 2024.

LifeYield Releases Annuity Income Layer

LifeYield, the fintech firm in tax-efficient, multi-account portfolio management, announced the release of its Annuity Income Layer for annuity manufacturers and distributors.

The Annuity Income Layer, an enhancement to LifeYield’s Social Security+ benefits optimization tool, makes it easier for financial advisers to illustrate a manufacturer’s annuity products with minimal disruption and data collection.

“Tens of thousands of financial professionals use LifeYield technology to demonstrate the value in dollars and cents of various Social Security filing strategies,” Mark Hoffman, chairman, CEO and co-founder of LifeYield, said in a statement. “Next, conversations frequently and quickly turn to a client’s income needs and retirement savings.”

“With the Annuity Income Layer, manufacturers and distributors can empower financial professionals to pivot to creating annuity illustrations and proposals with the data they’ve already collected,” Hoffman said. “They can also show how an annuity fits into a retirement income plan with Social Security and other savings.”

NAGDCA Offers Enhanced SECURE 2.0 Resource for Public Sector DC Plans

The National Association of Government Defined Contribution Administrators announced availability of an enhanced SECURE 2.0 Resource. NAGDCA is a professional association for plan administrators and services providers of government-sponsored defined contribution retirement plans.

NAGDCA’s SECURE 2.0 Resource provides a sortable index of the provisions affecting public sector plans linked to comprehensive fact sheets and offers insights into NAGDCA’s advocacy efforts on behalf of members and the government plan sponsor community at large.

“NAGDCA’s enhanced SECURE 2.0 Resource is designed to help public sector plan sponsors effectively navigate the complexities of SECURE 2.0 and implement its many provisions,” Matt Petersen, NAGDCA’s executive director, said in a statement.

“As awareness of the necessity of DC plans to support the retirement readiness of public sector employees continues to grow, providing information, insight, and guidance on legislation impacting government DC plans continues to be among NAGDCA’s primary objectives. The SECURE 2.0 Resource is just one example of our commitment to fulfilling on this objective,” Petersen said.

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