Nearly half (44%) of 401(k) plan sponsors are conducting a recordkeeper search in the next 12 months. One-quarter (25%) are simply looking to benchmark recordkeeper services or fees, but one in five (19%) plan sponsors are actively seeking a new recordkeeper. Why and why now? According to our research, plan sponsors chiefly want to consolidate vendors—they seek a partner that can maintain participant retirement accounts, but also administer health savings accounts (HSAs) or equity compensation plans. Cost, advanced technical capabilities, and cybersecurity are also top considerations. This increased search activity is happening on the heels of widespread consolidation in the recordkeeping market. There is a greater need for recordkeepers to achieve larger scale to remain profitable in a low-margin business, creating a challenge for smaller vendors.

Learn what it will take for recordkeepers to win and retain plan sponsor business across plan asset segments with our latest report, U.S. Retirement Markets 2021: Solidifying Relationships with Plan Sponsors and Participants. This research highlights key challenges and opportunities in the recordkeeper market, but also represents Cerulli’s broadest coverage and sizing of the U.S. retirement market, addressing the following market segments: individual retirement accounts (IRAs), corporate and not-for-profit (NFP)/governmental defined contribution (DC) plans, Taft-Hartley DC plans, DC multiple-employer plans (MEPs), and corporate and public defined benefit (DB) plans.