Fiduciary Support Fuels Consulting Demand

Most advisers in the small to mid-sized market say that increasing sponsor concerns about revenue sharing and fiduciary duties are fueling consulting demand, according to Cerulli Associates.

Large consultants answer even more strongly, with 69% agreeing that such sponsor concerns are fueling consulting demand. On other issues, consultants in the large plan space and consultants in the small and mid-sized market showed similar results.

Other results of research of consultants in the small and mid-size market, according to the latest The Cerulli Edge—Retirement Edition:

  • 38% agree broker/dealer and platform research groups are formidable competitors (38% of large consultants)
  • 29% agree lifecycle funds are inferior due to high reliance on proprietary managers (31% of consultants)
  • 27% agree recordkeepers will increasingly act in an advice capacity due to recent pension reforms (19% of large consultants)
  • 13% agree lifecycle funds and other pre-packaged solutions are taking some business away from consultants (19% of large consultants)

Wealth Transfer

Cerulli’s research also found that advisers who are active practitioners of wealth transfer planning those who spend more than 25% of their time on wealth transfer issues) cater to a slightly more affluent client base than do passive practitioners (advisers who spend 1% to 25% of their time on wealth transfer). The most frequent wealth tier served by both groups is the mass affluent ($1 million to $5 million in net worth).

Interestingly, the passive wealth-transfer practitioners are more enthusiastic users of annuities as destinations for rollover dollars. In fact, more than 40% of advisers who are actively involved in wealth transfer shun any type of annuity when assisting clients with rollover issues, according to Cerulli.