BlackRock Heightens DC-Adviser Focus

BlackRock Inc. is making a further push into the 401(k) market with a new defined contribution practice management program geared toward retirement plan advisement.

The firm announced the launch of its Defined Contribution Practice Management Program on Tuesday, along with the appointment of Carrie Schroen to lead the effort in a newly created post as head of U.S. DC intermediary business. Schroen moves into the role from a prior position as national sales manager for BlackRock’s U.S. wealth advisory team.

Carrie Schroen

The DC program provides tools and resources for plan advisers “of all sizes,” as the “role of intermediaries is expanding, large national firms are consolidating, and demand for personalized investment solutions is increasing,” BlackRock wrote in its announcement. The New York-based asset manager also noted the “convergence of wealth and defined contribution as a new frontier for the DC Advisor channel.”

Schroen pointed to the firm’s survey that showed participants are looking for more investment advice for their workplace savings, with 56% of respondents noting that they are not confident enough to manage workplace plans themselves.

“We are extremely passionate about closing the access gap for the American worker today, and I know that advisers sit at the epicenter of that opportunity,” she says. “This plan allows them, in one synthesized setting, to address any retiree’s needs today, whether in the workplace or wealth advisement.”

BlackRock also cited Cerulli Associates research that shows 61% of DC advisers want more support in building their business, and 39% want help growing their wealth business.

Growing Need

BlackRock’s program is targeting a growing need for advisement of both qualified retirement plans and the country’s first wave of individual participants who will be retiring almost exclusively on savings from DC plans and Social Security. Schroen notes Cerulli Associates’ findings that DC assets managed by retirement advisers grew by a 14% compound annual growth rate from 2018 to 2022, compared to a 6% CAGR for the overall adviser market.

“We know that the adviser and the work that they do are uniquely positioned to serve American workers,” Schroen says. “We will be positioning ourselves to be a partner to the adviser today, as they exist across all spectrums of retirement.”

BlackRock’s retirement push goes into a space already seeing considerable consolidation among both recordkeepers and aggregators of retirement, wealth advisement and insurance, with many firms growing in both scale and capabilities.

The new DC divisional head says that, rather than competing with these advisory firms, BlackRock is working on deepening relationships and is interested in “co-creating materials and doing bespoke work.”

“We have very close relationships with plan advisers across the country,” Schroen says. “We have taken their direct feedback, and we will continue to do so as we work in partnership to complete and complement any programs they have in place.”

The New York-based firm is the country’s largest DC investment-only asset manager with $1.16 trillion in assets, ahead of the Vanguard Group, according to PLANADVISER’s 2023 DCIO survey.

Tools and Resources

Schroen notes that the DC adviser site’s emphasis is on “agnostic” educational and practice management tools and resources for advisers. The website’s homepage is focused on materials about business development, uncovering prospects and fostering relationships with both plan sponsors and participants.

“These tools are really specific to education around the plan space, rather than product-focused,” she says. “This is about helping the adviser access opportunities with plan sponsors to develop more and more workplace retirement plans, and then also help current participants save more and connect more to their 401(k).”

Schroen points to three main offerings through the DC adviser platform:

• Resources for plan and financial advisers “wherever they sit on the spectrum of engagement,” whether they have a robust practice and are looking for new ideas, or are just getting into the qualified plan space;
• Access to “in-field” DC consultants that can be contacted through the site; and
• Connection to wealth management resources for working with individual savers.

BlackRock’s general adviser center, targeting both DC and financial advisers, includes an investment strategies and products dropdown, pointing to investments that include mutual funds, target-date funds and separately managed accounts.

The pot of money in DC investments, let alone individual retirement accounts, has grown over the past decade. There was $3.77 trillion in DC investments in 2010 and $5.03 trillion in IRAs, according to statistics from the Employee Benefit Research Institute via the Board of Governors of the Federal Reserve System. As of 2022, there was $7.98 trillion in DC assets and $11.95 trillion in IRAs.

What’s changing about the industry today, Schroen says, is the need for more individual management of those assets, noting that personalization “is critical, whether in wealth or the workplace.”

Schroen’s new position was effective January 15, overseeing an “already established” leadership team, according to the announcement.

Anne Ackerley, head of BlackRock’s retirement group, said in a statement with the announcement that: “Through new tools and new leadership, we will help strengthen relationships and position BlackRock as the best partner to our clients.”