Can Financial Soundings Help Advisors Improve Their DC Plan Scalability?

The Defined Contribution (DC) Plan segment is attractive to many financial advisors as a hedge against volatile markets, since participants in DC plans supply a dependable stream of income, due to automatic deductions. More advisors are leveraging their relationships with employers to cross sell wealth management, group benefit, rollovers and retirement income services.

As attractive as the DC market is, only half of advisors are currently servicing any plans. According to a 2010 industry report from The Retirement Advisor University:

There are 300,000 financial advisors (FAs) actively servicing the investing public; 50% or 150,000 have at least one plan; 75,000 have at least 3 plans; and 15,000 or 5% of the market have 5 or more plans which signals that they are starting to get serious. There are fewer than 5,000 “elite” DC advisors (advisors who have 10 plans, $30 million AND 3 years of experience).*

According to Fred Barstein, Founder and Executive Director of The Retirement Advisor University, of the 625,000 DC plans with assets between $250,000 and $100 million, 18% do not have an independent advisor.

This represents a huge opportunity for advisors to expand their business and diversify their revenue sources. But most would probably need help in order to break into the DC market.

I recently interviewed Kurt Miller, CEO of Financial Soundings, an investment advisory firm that has developed a technology solution that advisors can leverage to scale their advice model and support multiple DC plans without adding staff or impacting other parts of their business. Continue reading