PLANADVISER - March/April 2018 - 12

plan focus
Most Recordkeepers Are Insurers
Highlights of BrightScope's proprietary research
I
n 2015,
the last
time BrightScope
tracked the data, insurance companies
were the most common type of
recordkeeper, providing such services
for 47.6% of the large 401(k) plans in
the BrightScope database. Insurance
companies were also significantly
more apt
to provide
recordkeeping
services for smaller plans, doing so for
nearly six in 10 plans with $1 million to
$50 million in plan assets, but for less
than two in 10 plans with more than
$250 million in assets.
Although asset managers provide
recordkeeping services to less plans
overall-30.9%-they have the most
market share in the large market.
Nearly six in 10 (59.1%) plans with over
$250 million to $500 million in assets,
and 55.8% of plans with over $1 billion,
have one as recordkeeper. In contrast,
in 2015, asset managers provided
recordkeeping services for 16.5% of
plans having $1 million to $10 million
in plan assets.
Smaller market share was seen
by banks, pure recordkeepers and
brokerage firms. This perhaps reinforces
the theory that insurance
companies and asset managers were
able to build the recordkeeping businesses
through product distribution.
Banks, which provided recordkeeping
for 6.2% of plans, were more likely to
do so for midsize plans. Banks' recordkeeping
activity rose to over 10% of
plans exceeding $50 million, up to $1
billion in plan assets.
Pure recordkeepers were more
likely to provide services for smaller
or larger 401(k) plans, but less so for
midsize plans in 2015. Overall, pure
recordkeepers served 9.5% of plans,
but that fell from 16.8% of plans with
$1 million to $10 million in assets
to 2.2% of plans with more than
$100 million through $250 million.
Brokerage firms, including discount
and full-service firms, were more apt
to support midsize plans. -PA
Types of Recordkeepers Used by 401(k) Plans
Percentage of plans, among those with audited 401(k) filings in the
BrightScope database, by type of recordkeeper, in 2015
Type of Recordkeeper
Asset
Plan Assets
$1mm - $10mm
>$10mm - $50mm
>$50mm - $100mm
>$100mm - $250mm
>$250mm - $500mm
>$500mm - $1b
>$1b
All plans
Manager
16.5
25.3
41.1
46.1
59.1
58.1
55.8
30.9
Insurance
Company
59.5
57.2
37.1
30.2
19.0
18.7
15.5
47.6
Brokerage
Firm
4.9
4.9
8.0
7.9
7.9
8.1
3.3
5.8
Pure
Bank
2.3
4.2
10.9
13.7
10.2
10.1
6.6
6.2
Recordkeeper
16.8
8.3
2.8
2.2
3.7
5.1
18.8
9.5
Percentage of participants, among plans with audited 401(k) filings in
the BrightScope database, by type of recordkeeper, in 2015
Type of Recordkeeper
Asset
Plan Assets
$1mm - $10mm
>$10mm - $50mm
>$50mm - $100mm
>$100mm - $250mm
>$250mm - $500mm
>$500mm - $1b
>$1b
All Plans
Source: BrightScope
Manager
14.7
25.1
37.0
35.2
48.7
47.9
42.6
40.0
Insurance
Company
59.2
58.4
41.9
30.9
23.0
19.2
19.0
27.4
Brokerage
Firm
4.1
3.6
4.6
5.2
6.0
5.5
1.8
3.6
Pure
Bank
3.0
4.1
13.0
25.2
18.4
23.6
16.5
17.3
Recordkeeper
18.9
8.8
3.5
3.5
3.9
3.8
20.1
11.7
12 | planadviser.com march-april 2018
http://www.planadviser.com
PLANADVISER - March/April 2018

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