The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
March 2014, BOSTON. New research from global analytics firm Cerulli Associates projects direct retail channel assets to reach $5.9 trillion by the end of 2016.
"Direct firms continue to benefit from serving a wide array of investors, regardless of wealth or age," comments Roger Stamper, senior analyst at Cerulli. "The majority of these firms have the ability to service both small and large accounts because their platforms are adaptable and scalable."
Cerulli's Retail Investor Product Use 2013 report is designed to help product manufacturers and distributors understand retail investors' product preferences, product use, and product needs to better inform development and distribution initiatives.
"Some providers in the direct channel are able to leverage their existing retirement relationships with clients as a catch-all when these clients want or need additional services," Stamper explains. "These firms essentially have a head start on the competition because of the vast amount of clients they are already serving on their retirement platforms."
This Cerulli report points out that since these firms are able to leverage existing relationships, they have the ability to message these clients about the services offered within their plan on a somewhat frequent basis.
"The ongoing support and services to these investors is likely to pay off in the future as a number of those clients should graduate into higher wealth tiers," Stamper continues. "Many firms offer consolidation and a seamless experience between their investing and other services."
According to Cerulli, more than two-thirds of investors cited the ownership of a direct account. Although investors maintain direct accounts for reasons unique to their situation, most indicate they want some control over certain aspects of their finances, outside of a traditional advisory relationship.