retirement plan channel

MaryW commented on the word retirement plan channel

In today's market, asset management services are distributed to US-based investors primarily through five principal distribution channels: direct, professional advice, retirement plan, supermarket platforms and institutional.

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3. Retirement plan channel. This is the largest channel and includes primarily corporate 401(k) retirement plans in which beneficiaries choose from a menu of investment product options. With the decline of defined benefit plans in the US, 72% of American households own funds distributed through employer-sponsored retirement plans. Employers sponsoring defined contribution plans rely upon third parties to administer the plans and provide investment options to employees. Third-party administrators (TPAs) effectively act as the outsourced client interface for the fund manager and handle a wide variety of administrative services. As with the case of most distribution channels, because the TPA acts as the interface between client and manufacturer, the manufacturer here is left with limited to zero direct client relationship and limited brand identity.

Ernst & Young, Sea of Change on the Horizon: US Fund Distribution 2014 (2014), pp. 5, 7

December 28, 2016