Cerulli and Morningstar find firms spending to turn DC plan participants into wealth clients

Cerulli Associates and Morningstar's white paper "Building the Bridge to Wealth," published this morning, describes an industry spending to turn the workplace retirement plan into a wealth-management client channel, with advisers, wealth firms and recordkeepers investing heavily in strategies meant to convert defined contribution plan relationships into wider advisory business. The same morning brought Crisil Coalition Greenwich's "Advised and Self-Directed: Winning the Hybrid Wealth Client," which arrives at that idea from the investor's side: affluent households increasingly combine adviser-led and self-directed accounts and want advice models that reach past traditional retirement planning.

Supply is no longer the open question. Cerulli found that 63% of the advisers it surveyed — the release gives no sample size — view leveraging DC plans for wealth-client prospecting as at least a moderate priority, while participants on the receiving end answered differently: just 40% reported working with a financial adviser for ongoing financial planning, retirement planning and investment management, leaving 60% who did not.

Among those without an adviser, appetite is soft: 20% would like to hire one, 45% are undecided, and the remaining 35% fall in neither group. The reasons point away from the plan menu: 54% say they are not wealthy enough to work with an adviser, 31% do not know where to find one, and 67% say advisory fees are not worth the cost. Perceived qualification, discovery and price — a recordkeeping dashboard does not fix any of the three on its own.

Whatever the objection, the underlying need is broad. More than 90% of participants rate maintaining a good quality of life and achieving financial peace of mind as at least moderate priorities, and 92% put retirement savings at moderate or major priority; participants are also increasingly seeking support beyond retirement — budgeting, emergency savings, home purchases, college funding — ground a wealth adviser covers and a plan fiduciary does not. Donnie Ethier, Morningstar's director of retirement, put it in the report: "The lines between retirement advice and wealth advice are blurring. Participants increasingly expect guidance that addresses their complete financial lives."

That undecided 45% is the prize both studies are circling. Cerulli found 20% of non-advised participants actively want an adviser — a conversion any recordkeeper or advisory firm with a participant touchpoint could plausibly win — and the near-majority behind them is where the channel's economics get settled. The three objections Cerulli logged sit outside the plan menu: a business organized around asset minimums, a referral path that assumes people know someone to ask, and a fee model that charges a percentage of assets to clients who have not yet accumulated any.

The recordkeepers named in the paper hold the most direct line to that undecided group: they run the participant's login and the plan's digital front door, and this publication has argued that digital experience is now a plan retention asset, citing J.D. Power's finding of a 53-point satisfaction gap between the best consumer apps and plan websites. If the workplace plan is to sit atop a wealth funnel, the first stage of that funnel is the screen a participant sees every payday — an investment a recordkeeper can make without hiring another adviser.

The advice side has a staffing problem the white paper does not address. Cerulli's earlier September research puts roughly 35% of advisers into retirement within a decade, and the plan-advisory executives interviewed for that work graded recruiting from a D-plus to a B-minus. A bridge built on adviser relationships runs into a profession that is losing the advisers who would staff it; firms that can move participants at scale without adding headcount — digital advice, managed accounts, or a handoff built into the recordkeeping relationship — sidestep a hiring constraint the rest of the industry cannot, which may be the strongest case for the recordkeeper's place at the center of this buildout.

The Crisil study describes a related drift: affluent investors blending adviser-led and self-directed accounts are telling the industry they do not want to choose between the plan, the app and the adviser. That is the same participant Cerulli says expects guidance across an entire financial life, and the same one both sets of firms are spending to reach. Two studies, published the same morning from separate samples, land on a single demand: advice that follows the client across accounts.

What neither paper settles is whether the DC-to-wealth buildout expands the advice market or concentrates it. The 40% of participants who already have an adviser are the easiest to deepen; the undecided 45% determine whether building the bridge opens new ground or adds a lane to the one already traveled. Among the objections on file, the fee one looks hardest to move because it is the one the industry sets for itself — a participant who believes advice is not worth the cost is not a prospect for a better login or a warmer introduction, and 67% is a large share to leave on the table.