The past 18 months have raised more questions than answers. Regardless of the serious issues facing the financial services industry - specifically in the mutual fund business - more than ever it's good to be in the defined contribution market. Here are some observations about what to expect in 2010 and beyond.

Sponsors

With unemployment and cost cutting expected to continue, do not look for sponsors to splurge on benefits - especially retirement plans. Sponsors want nothing: no cost, no work, and no liability. As administrative staffs diminish and companies stay focused on their core businesses, do not expect recordkeeper change to rise above 4%; more likely, it will stay below 3%. Of course, advisers who deliver "nothing" - especially less risk of fiduciary liability with participant lawsuits looming - will be in hot demand, especially if they can also help better prepare participants for retirement. Will sponsors wake up to the hidden costs in DC plans? Will they care?

Advisers

It has never been so good to be a "master" or "PhD" retirement adviser (those with more than 25 plans or $100 million under management), but it has never been as challenging either. While most experienced advisers have doubled their books over the last 24 months, advisers not necessarily savvy in business management have had to struggle with lower revenue, higher costs, increased staff, little or no access to capital, and evaporating exit strategies. Those advisers that have weathered the storm and have learned the hard lessons will be that much stronger. Those that figure out how to capture rollovers and secure other benefit and executive comp mandates will rise to the top. Will the expected influx of new advisers looking to tap the increasing flow of money in DC plans challenge the old guard?

Broker-dealers

Look for the specialty groups like 401(k)Advisors/RPAG, CapTrust, NRP and SageView to thrive as the master and PhD advisers seek more supportive homes. While the demise of the wirehouses has been greatly exaggerated, their advantages are diminishing, as is their focus. The independents allow retirement advisers to do their business with little meddling or support. The move to pure RIA status will grow and would be even greater if any of the major platforms had a clue about how to support retirement advisers. The elusive holy grail of rollovers and gaining access to the mass affluent in DC plans will generate interest from the large indies and wirehouses, but will it garner resources and focus?

Recordkeepers

The battles for the very large and very small markets are over unless fee disclosure causes mass exodus from insurance companies in the smaller markets. Large market providers are bleeding to death on costs while big-name, small-market recordkeepers have to move up-market to maintain asset growth as the plan change rate grinds to a halt. Providers with mature TRO businesses are more secure than pure DC recordkeepers. Consolidation will only happen if acquirers are willing to overpay. Everyone is worried about the "Great-West" factor, or whether someone has truly figured out how to do things cheaper or if they are just buying market share. Open architecture providers like CPI, Newport, Daily Access, RSM McGladrey, BPA and smaller ones will still grow, but most are too small to matter, Ascensus excepted. Can the industry sustain the current cost of wholesaling as price pressure only gets worse?

DC investment

Those with platform placement, significant assets, the right share classes, good performance and distribution had a very merry Christmas. DB managers, hedge funds and mutual funds late to the dance have their noses up against the window, but they are just fogging up the glass. Getting platform placement is harder than ever unless the right retirement advisers are advocating. A wholesaling force focused on DC advisers isn't in many budgets, and getting data to properly compensate retail wholesalers is nearly impossible. Target-date and asset-allocation funds account for more than 50% of flow, but proprietary models are numbered. Will ETFs become significant? Will collective trusts move down-market?

TPAs

Look for significant consolidation in the TPA market, especially for recordkeeping administrators who struggle with distribution and have less ability than ever to get capital to grow or invest in technology. Is anyone willing to try another roll-up? NIM is buying compliance-only TPAs, but capital is scarce and margins are thin. The unbundled TPA service model in the small and micro markets will continue to gain market share, but there is room for newer recordkeepers as incumbents struggle with re-pricing. Will the TPA unbundled, group annuity model play up-market?