Big banks go after 401k trillions
Bank of America (BAC +0.13%, news), JPMorgan Chase (JPM -7.44%, news) and Wells Fargo (WFC +0.17%, news) are adding staff, creating easier-to-use technology and competing on fees in an effort to win a bigger share of the trillions of dollars in 401k savings plans.
JPMorgan almost doubled its sales force dedicated to selling retirement-plan services to employers in 2010, says Michael Falcon, whose job as head of retirement in the U.S. and Canada for the bank's asset management unit was created in January. "It's one of the top priorities" at JPMorgan, he says.
Americans held $2.9 trillion in 401k plans as of September, and the total may reach $4 trillion by 2015, according to Cerulli Associates, a Boston research firm.
Increased competition from banks may lead to lower costs and more choices for employers and savers, says Laura Pavlenko Lutton, an editorial director in the mutual fund research group at Morningstar.
And it may mean less revenue for the top three 401k administrators: Fidelity, Aon Hewitt and Vanguard, which together had 43% of the market at the end of 2009, compared with a combined share of less than 10% for Bank of America, JPMorgan and Wells Fargo, according to Cerulli.