Business Development


RIAs Rock 401(k)

The “pure RIA” selects “Registered Investment Advisor” as his or her primary channel affiliation in our research while the “hybrid RIA” does at least some 401(k) business as an RIA but selects a broker-dealer as his or her primary affiliation (wirehouse; regional, independent, bank or specialty BD). More familiarly, the hybrid RIA is dually registered, the pure RIA is not.

From around two percent of all 401(k)-active advisors ten years ago to eight percent in 2008, pure RIAs have grown to represent 17% of 401(k) advisors in 012. But even that isn’t the whole story. In 2008 pure RIAs were responsible for 12% of all advisor-generated sales (measured by assets) while today that figure is 29%. Hybrid (dually registered) advisors represent another 27% of all 401(k) advisors. This means that combined, 44% of all 401(k) advisors do at least some business as RIAs. Among Heavy advisors (the specialists, those deriving at least 60% of their total practice income from 401(k), this figure rises to 64%.

Write 401(k) Business as a RIA By 401(k) Share of Income

Do you write any 401(k) business as a registered investment advisor or RIA or not?

Hybrid RIAs also have attractive books of business as measured by 401(k) AUM (average of $122 million), larger than pure RIAs ($84 million) and much larger than non-RIA advisors ($51 million).

The differences don’t stop there: pure and hybrid RIAs also stake out distinctive positioning when it comes to describing their firm’s value proposition.

  • Hybrid RIAs more often describe annual plan reviews, plan design, consulting and conducting group enrollment meetings as major parts of their value proposition while…
  • Pure RIAs more often cite conducting provider fee analyses and benchmarking, creating custom asset allocation models and fiduciary investment services (both 3(21) and 3(38)) as major parts of their value proposition.
  • Non-RIA advisors are more likely to cite one-on-one retirement planning for executives and IRA rollover services for departing participants as what they do.

About the research

These findings are based on telephone interviews with a representative cross-section of 591 advisors deriving income from 401(k) plans conducted in waves between January and November, 2012.

About Brightwork Partners, LLC

Delivering both multi-client and custom studies, Brightwork is a research-based consulting firm with a special focus on investment, product and distribution issues in the retirement services industry; .

For more information: Merl W. Baker or Ronald L. Bush, 203.487.2000; ,







Insight and information to help you
manage and grow your business.