How Far We’ve Come
The end of a year is always a good time for reflection, casting an eye
back over the roads we have traveled, as we head into a new year.
Reported by Alison Cooke Mintzer
In this issue, we try to touch on some of the major industry topics of the year. It is no secret that mutual funds continue to dominate the investment lineup of most 401(k) plans. However, lately there is more and more discussion about the use of exchange-traded funds (ETFs) and collective trusts as viable investment alternatives. Despite the exponential growth of ETFs as retail investment options over the years, concerns linger about their ready absorption in many retirement plan designs, and retirement plan advisers have remained, in large part, understandably skeptical of their usage in 401(k) plans. Collective trusts on the other hand, appear to be more prevalent in the retirement plan world. Traditionally, though they have only been the purview of larger plans, they are now moving down-market. Of course, while in many respects they look and operate somewhat like mutual funds, they are not the same thing, and advisers and plan sponsors must be aware of the differences. You can learn more about the current schools of thought surrounding the use of ETFs and collective trusts in 401(k) plans in “The Next Generation.”
Each year PLANADVISER recognizes retirement plan advisers we call the “most successful.” There are, of course, many ways to gauge success—some objective and quantifiable, others less precise perhaps, but no less meaningful. The success of the advisers recognized in this issue, advisers whose names were drawn as part of an evaluation of nominations for PLANSPONSOR’s Retirement Plan Adviser of the Year, are listed based on quantifiable data. Initially that recognition was extended only in terms of assets under advisement, but over the years we have expanded that acknowledgement to take into account other measures, such as number of plans under advisement and a foothold in areas beyond 401(k)s, such as defined benefit, nonqualified, 403(b) plans, and 457 plans. You can see the lists for assets under advisement and plans under advisement (each for both teams and individuals) here.
Retirement income continues to be an industry buzzword, and it is clear that many investment managers, recordkeepers, and other firms in the industry are doing much development and product introduction to cater to that market. One of those areas that has had a unique focus is that of in-plan annuities. However, despite the efforts of multiple providers (with many more in development), alongside an acknowledged need for retirement income help, particularly by participants that have underfunded their retirement accounts, plan sponsors have been slow to embrace the products. Do these products lack a market or is something else at work? In “Getting the Word Out,” we try to help you answer the questions that may be holding back your plan sponsor clients.
For those advisers, and there are many of you, continuing to focus on 403(b) plans as an area of interest or opportunity, we continue our series of articles about the various market segments with a focus on nonprofit programs. In “Greater Plans,” (page 42) experts that work with those programs discuss the challenges and unique circumstances they see in working with nonprofit 403(b)s.
As you reach the end of your year and sales season, I hope you have ended 2009 in a better place than you did 2008 (or at least your and your clients’ accounts have). Here’s hoping 2010 continues to get better. I wish you a happy and healthy holiday season and look forward to seeing you back here next year!