The retirement plan provider business isn’t sexy, but it’s huge. The Investment Company Institute counted $10.4 trillion in defined contribution plan assets at the end of the first quarter, $7.3 trillion of that in 401(k) plans.

It’s one thing for companies in the defined contribution space to nudge workers into their 401(k) plans. But once those participants are in, later on they are going to need more help outside the plans—help with wealth management and financial planning services. Their priorities are going to change after they move past saving and managing their debts.

And the defined contribution plan providers themselves have come to realize that they are in the best place to take advantage of those plan relationships they already have and now build out wealth management services. One of their incentives is that the DC business comes fraught with peril: providers face fee compression and lower margins (not to mention lawsuits). So there are natural reasons for them to add higher margin wealth management services.

That’s the takeaway of Boston’s Cerulli Associates in a new report, “U.S. Retirement End-Investor 2022: Fostering Comprehensive Relationships.”

“DC providers are well positioned to nurture deeper, more comprehensive relationships with retirement investors that extend beyond their DC plan by helping them navigate complicated financial dilemmas, questions and challenges over the course of their working lives,” Cerulli said in a press release announcing the study. “One-third (34%) of active 401(k) participants name their 401(k) provider as their primary source of retirement planning and advice, followed by a financial professional (16%)," according to the research.

Cerulli says that more than $440 billion in DC assets got rolled into IRAs with an advisor’s help in 2021. “The vast majority (86%) of advisor-intermediated rollover assets are through an existing advisor relationship,” the release said.

The author of the report, Cerulli associate director Shawn O’Brien, said in the press release that the results of the study show the importance of establishing relationships with clients earlier in their years—before the rollovers happen.

David Kennedy, a senior analyst in retirement research at Cerulli’s, echoed those sentiments in an interview with Financial Advisor magazine. “DC plans are one of the most widely used wealth accumulation vehicles in the country,” he said. “As you grow and accumulate wealth … down the road as [the client] approaches retirement, [they’re] going to need more wealth management focused solutions.” Getting people to start saving and accumulate is the first goal in the early years, but when they retire, the question is: Where will they get the advice and can the companies retain that business when participants leave the plans?

Giant RIAs like Captrust, known for its 401(k) business, have added wealth management businesses in the same cities it has DC plan offices, a strategy shared by the company’s CEO, Fielding Miller, in 2018. He told the magazine that it was always part of the firm’s goal to move into high-net-worth wealth management, but first the firm needed a launching pad—and it had one in its dominant DC plan business.

“We’re going back into the same markets [we have DC plans] and trying to buy wealth management firms in the same cities and pairing them up,” Miller said at the time.

In early July, Rockford, Ill.-based Savant Wealth Management, an RIA firm with $13 billion in assets under management and advisement, said it had acquired Alliant Wealth Advisors, a Manassas, Va.-based RIA firm, and among the many reasons for the deal was Alliant’s presence in the 401(k) space, said Savant’s founder and CEO, Brent Brodeski.

“They do a lot of business in the retirement and 401(k) plan market, as we do,” Brodeski said. “The retirement plan business is one that’s pretty scattered and it’s hard to find seasoned retirement plan talent.”