PLANADVISER - July/August 2021 - 2

publisher's note //
What Is Too Few?
I
n late July, it was announced that, despite getting
approval from the European Commission, and even
with Aon's agreement to sell its U.S. retirement business
to Aquiline Capital Partners and its Aon Retiree
Health Exchange business to Alight, the proposed
merger of Aon plc and Willis Towers Watson (WTW)
has been terminated. The proposed combination was
first announced a year ago March 9, and the Department
of Justice (DOJ) filed a civil antitrust lawsuit this
June 16 to stop the merger.
The lawsuit alleged that the combination of Aon and Willis Towers Watson
would reduce competition in key markets served by the firms, effectively
consolidating the industry's " Big Three " insurance brokerages into a Big Two-
although there are many smaller insurance brokerages. In a statement after
the termination of the agreement was announced, Attorney General Merrick B.
Garland called it a " victory for competition and for American businesses and,
ultimately, for their customers, employees and retirees across the country. "
Garland's statement continued: " American employees and retirees rely on
dependable health care and retirement plans provided by their employers. Many
of those employers, in turn, rely on insurance brokers [such as] Aon and Willis
Towers Watson for managing the complexities of these health and retirement
benefits. Businesses also rely on Aon and Willis Towers Watson to compete
for the bulk of their risk management portfolio, including property and casualty
insurance. The decision to abandon this anti-competitive merger will help
preserve competition in insurance brokering. "
When I read that statement, I couldn't help but reflect on the consolidation
that has gone on across the retirement plan industry. It was the same month we
released our PLANSPONSOR Recordkeeping Survey, which has annually shown
the contracting of the universe of retirement plan recordkeepers and the significant
market share that the few largest take: The top five recordkeepers have
61.8% of the market's assets. In fact, as we published that data, Empower added
Prudential's retirement plan business to its list of acquisitions, making our survey
immediately outdated-and leading to the largest two recordkeepers, Fidelity
and Empower-including Prudential-administering 43.6% of the market!
On the advisory business side, when I started as a reporter, I would write
about the few big wirehouses, and it seems like we are witnessing the creation of
something similar on the registered investment adviser (RIA) side. Also in July,
CAPTRUST Financial Advisors announced the firm's 50th acquisition since 2006,
adding another $2.1 billion in assets under management (AUM), while Hub International
added $4.6 billion in an acquisition, and SageView brought on $17 billion
in client assets in a separate acquisition. The month prior, OneDigital also added
to its AUM in an acquisition of an advisory group with $6 billion in client assets.
As we at PLANADVISER speak to merger and acquisition (M&A) experts
around the industry, everyone seems to agree that the pace is likely to continue.
This will result in " highly scaled, centrally managed, well-capitalized and
broadly focused firms, many of which are rapidly buying the best performing
firms in local geographies, " reported John Manganaro on planadviser.com.
Now, none of these are at the same level as the scuttled Aon-Willis Towers
Watson deal, yet. But, as I reflected in Garland's quote about the need to preserve
competition, I couldn't help but wonder when this question will come up in our
industry: What will be the sign that an advisory firm or a recordkeeper is too big?
And when is it time to step back and ensure that plan sponsors and participants
are still getting the best services, pricing and options for them, not what the big
firms are willing to offer? -Alison Cooke Mintzer, Publisher
publisher: Alison Cooke Mintzer
Alison.Mintzer@issmediasolutions.com
creative director: SooJin Buzelli
SooJin.Buzelli@issmediasolutions.com
managing editor: Judy Faust Hartnett
Judy.FaustHartnett@issmediasolutions.com
managing editor, planadviser.com:
John Manganaro
John.Manganaro@issmediasolutions.com
editorial staff: Lee Barney, Rebecca Moore,
Michele Theodore, Amanda Umpierrez,
Karen Wittwer
contributors: Ed McCarthy, Judy Ward
surveys & research: Brian O'Keefe;
Angela Marinakis, Jackie Scott
design & production: Donna Bien-Aimé,
Alanna Jacobs, Joy Liu, Linda Liu
design contributor: Cherese Rambaldi
art contributors: A. Richard Allen (cover), Melinda
Beck, Tim Bower, Alfonso de Anda, Kiki Ljung,
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Vilarino, James Yang
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PLANADVISER - July/August 2021

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