Tags: 401(k)

Retirement plans are seen as a massive untapped opportunity for advisors, but these accounts remain a sideline for most professionals who actually work with them, research firm Cogent says.

If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits.

Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization.

Plus, get other membership benefits, including:

Analysis daily of issues affecting advisors Aggregation of news from dozens of sites targeting wealth managers Reviews by advisors of practice management applications 30 independent experts blogging on advisor business issues 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE Register Now

A full 52% of the advisors who work with 401(k)s and other retirement plans are "dabblers" for whom the business represent maybe 5% of their AUM.

It's a broad market -- Cogent says there are 315,000 advisors with a toehold in this space -- but even at the high end, these accounts don't get very large at all.

As such, there is a vast amount of room for consolidation as the "dabblers" start working together or offload their 401(k) business to bigger competitors.

While only 7% of 401(k) advisors have collected more than $25 million in AUM from this side of their practice, the sheer size of the population means that fraction represents 22,000 advisors -- sharing at least $485 billion in client assets.

At this level, they're supporting an average of 30 plans apiece, so these are big players.

It's a very different business model from the white-glove high-net-worth business, but it's just getting started.