Most Recordkeepers Are Insurers
In 2015, the last time BrightScope tracked the data, insurance companies were the most common type of recordkeeper, providing such services for 47.6% of the large 401(k) plans in the BrightScope database. Insurance companies were also significantly more apt to provide recordkeeping services for smaller plans, doing so for nearly six in 10 plans with $1 million to $50 million in plan assets, but for less than two in 10 plans with more than $250 million in assets.
Although asset managers provide recordkeeping services to less plans overall—30.9%—they have the most market share in the large market. Nearly six in 10 (59.1%) plans with over $250 million to $500 million in assets, and 55.8% of plans with over $1 billion, have one as recordkeeper. In contrast, in 2015, asset managers provided recordkeeping services for 16.5% of plans having $1 million to $10 million in plan assets.
Smaller market share was seen by banks, pure recordkeepers and brokerage firms. This perhaps reinforces the theory that insurance companies and asset managers were able to build the recordkeeping businesses through product distribution. Banks, which provided recordkeeping for 6.2% of plans, were more likely to do so for midsize plans. Banks’ recordkeeping activity rose to over 10% of plans exceeding $50 million, up to $1 billion in plan assets.
Pure recordkeepers were more likely to provide services for smaller or larger 401(k) plans, but less so for midsize plans in 2015. Overall, pure recordkeepers served 9.5% of plans, but that fell from 16.8% of plans with $1 million to $10 million in assets to 2.2% of plans with more than $100 million through $250 million. Brokerage firms, including discount and full-service firms, were more apt to support midsize plans.
Types of Recordkeepers Used by 401(k) Plans
Percentage of plans, among those with audited 401(k) filings in the BrightScope database, by type of recordkeeper, in 2015
Type of Recordkeeper | |||||
Plan Assets | Asset Manager |
Insurance Company |
Brokerage Firm |
Bank | Pure Recordkeeper |
$1MM – $10MM | 16.5 | 59.5 | 4.9 | 2.3 | 16.8 |
>$10MM – $50MM | 25.3 | 57.2 | 4.9 | 4.2 | 8.3 |
>$50MM – $100MM | 41.1 | 37.1 | 8.0 | 10.9 | 2.8 |
>$100MM – $250MM | 46.1 | 30.2 | 7.9 | 13.7 | 2.2 |
>$250MM – $500MM | 59.1 | 19.0 | 7.9 | 10.2 | 3.7 |
>$500MM – $1B | 58.1 | 18.7 | 8.1 | 10.1 | 5.1 |
>$1B | 55.8 | 15.5 | 3.3 | 6.6 | 18.8 |
All plans | 30.9 | 47.6 | 5.8 | 6.2 | 9.5 |
Percentage of participants, among plans with audited 401(k) filings in the BrightScope database, by type of recordkeeper, in 2015
Type of Recordkeeper | |||||
Plan Assets | Asset Manager |
Insurance Company |
Brokerage Firm |
Bank | Pure Recordkeeper |
$1MM – $10MM | 14.7 | 59.2 | 4.1 | 3.0 | 18.9 |
>$10MM – $50MM | 25.1 | 58.4 | 3.6 | 4.1 | 8.8 |
>$50MM – $100MM | 37.0 | 41.9 | 4.6 | 13.0 | 3.5 |
>$100MM – $250MM | 35.2 | 30.9 | 5.2 | 25.2 | 3.5 |
>$250MM – $500MM | 48.7 | 23.0 | 6.0 | 18.4 | 3.9 |
>$500MM – $1B | 47.9 | 19.2 | 5.5 | 23.6 | 3.8 |
>$1B | 42.6 | 19.0 | 1.8 | 16.5 | 20.1 |
All plans | 40.0 | 27.4 | 3.6 | 17.3 | 11.7 |