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THE NOVEMBER 401KEXCHANGE
Opportunity Index¹
continued to show potentially slower plan sponsor
movement in the future. While the micro market (<$1
million) jumped to 7.12% from 4.85% in October, only
November 2001 was worse at 5.63% and the 14.45% number
in November 2002 dwarfs this month’s results. The small
market ($1-$10 million) November numbers were the lowest
ever at 4.72% just edging November 2001 at 4.78% and off
the high of 11.03% in 2002. Finally the mid market
($10-$100 million) continued to sink at 4.61% off its
high of 11.79% in 2003. Worse still is the Boston
Research Group 2007 +$5 Million Sponsor Study which
shows, of these plans actively searching or likely to
search, over 70% indicated that they were “very
unlikely” to change record keepers.
No
wonder everyone is looking to buy a competitor realizing
that organic growth will not significantly affect their
market share. With relatively high levels of
satisfaction, open investment menus, fewer bad providers
and no new feature or service that will not be
immediately copied, sponsors are reluctant to move. And
while some providers claim that they are having record
sales years, most of them are smaller and are measuring
growth by assets, not plans. The impetus to buy a
competitor, or sell, will only get stronger after record
keepers look at account balances and revenue at the end
of what has been a difficult 4th Quarter for
the stock market.
¹
Percentage of plans that indicate they are currently
searching or thinking of changing providers
|
MICRO MARKET (<$1 MILLION) YTD |
|
YEAR |
2004 |
2005 |
2006 |
2007 |
|
% PLANS IN PLAY |
10.28% |
9.77% |
7.31% |
6.02% |
|
# PLANS IN PLAY |
37,100 |
35,260 |
26,393 |
21,739 |
|
Inc/Dec Prev. Yr (%) |
41.3% |
-5.0% |
-25.1% |
-17.6% |
|
SMALL MARKET ($1-$10 MILLION) YTD |
|
YEAR |
2004 |
2005 |
2006 |
2007 |
|
% PLANS IN PLAY |
9.96% |
9.59% |
7.21% |
5.09% |
|
# PLANS IN PLAY |
8,814 |
8,490 |
6,377 |
4,508 |
|
Inc/Dec Prev. Yr (%) |
24.6% |
-3.7% |
-24.9% |
-29.3% |
|
MID MARKET ($10-$100 MILLION) YTD |
|
YEAR |
2004 |
2005 |
2006 |
2007 |
|
% PLANS IN PLAY |
9.79% |
12.15% |
7.26% |
5.53% |
|
# PLANS IN PLAY |
1,184 |
1,468 |
877 |
668 |
|
Inc/Dec Prev. Yr (%) |
23.0% |
24.0% |
-40.3% |
-23.8% |
|
TOTAL MARKET (<$100 MILLION) YTD |
|
YEAR |
2004 |
2005 |
2006 |
2007 |
|
ASSETS |
$65,586,069,905 |
$72,314,702,365 |
$47,935,674,120 |
$35,943,161,968 |
|
ASSETS % INCREASE/YR |
25.7% |
10.3% |
-33.7% |
-25.0% |
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