|
 Industry
Insight from Fred Barstein
2007 Market Share
Shows Signs of Consolidation
WITH MORE
CONSOLIDATION
likely over the next 18 months, the top 401(k) record
keepers gained significant market share in 2007 measured by
plan count. Based on 50,000 surveys of 401(k) plans with
$500,000-$100,000,000, which is almost 20% of the market,
the market share of the top 20 grew 10% in the mid market
($10-$100 million), 9% in the small market ($1-$10 million)
but only 6% in the micro market (<$1 million). The top 20
record keepers own 62% of mid market plans up 38% since
2000, 45% of the small market up 39% since 2000, and 46% of
the micro market up 40% since 2000. The top 10 small market
record keepers’ market share grew 62% over the last seven
years which was the greatest gain in any segment.
New to
the top 20 micro market record keepers since 2000 are
Hartford, Standard and Securian while Paychex, Hartford and
Nationwide are new to the top 10. In the small market, only
Standard and Paychex are new to the top 20 with ADP, John
Hancock, Hartford and Transamerica breaking into to the top
10 since 2000. There are six mid market record keepers new
to the top 20 but only Great West emerged in the top 10
since 2000 displacing a well known provider with an ironic
twist. Record keepers with the greatest gain in market
share over 2006 are highlighted in the chart below. (More
detailed market share information is available online to
subscribers of the 401kExchange Market Share and Ratings
Report.)
The
401(k) market is resembling a bar bell with some national
record keepers enjoying significant market share on one end;
smaller, niche, regional providers at the other with a
healthy share of market; and the weak sisters in the middle
striving futilely to gain scale. Plan advisors will be well
served to stick with the winners or suffer the consequences
of forced conversion and raids on current clients by other
well heeled advisors. Making the right choice is,
unfortunately, not obvious but common sense should prevail.
|
2007 Rank |
Under $1 Million |
|
1 |
Principal Financial Group |
|
2 |
ADP Retirement Services |
|
3 |
John Hancock Financial Services |
|
4 |
Paychex |
|
5 |
Great West Retirement Services |
|
6 |
Fidelity Investments |
|
7 |
Hartford Life Insurance Co. |
|
8 |
Nationwide Financial Services, Inc. |
|
9 |
BISYS (Ascensus) |
|
10 |
ING |
|
2007 Rank |
$1 Million - $10 Million |
|
1 |
Principal Financial Group |
|
2 |
Fidelity Investments |
|
3 |
BISYS (Ascensus) |
|
4 |
Great West Retirement Services |
|
5 |
ADP Retirement Services |
|
6 |
John Hancock Financial Services |
|
7 |
Hartford Life Insurance Co. |
|
8 |
ING |
|
9 |
Standard Insurance Co |
|
10 |
Transamerica |
|
2007 Rank |
$10 Million - $100 Million |
|
1 |
Fidelity Investments |
|
2 |
Principal Financial Group |
|
3 |
Vanguard Group, The |
|
4 |
Prudential Retirement |
|
5 |
Great West Retirement Services |
|
6 |
MassMutual |
|
7 |
Wachovia Retirement Services |
|
8 |
Charles Schwab & Co., Inc. |
|
9 |
Wells Fargo Bank |
|
10 |
T Rowe Price |
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