Driven by plan sponsors, the power in the 401(k) and defined contribution market has moved away from recordkeepers and toward retirement advisers. As evidenced by the 401kExchange Opportunity Index (see chart), less than 3% of plan sponsors in 2009 are thinking of changing or actively searching for a new recordkeeper, while more than 11% are likely to change their adviser and an even greater percentage of plans without an adviser are looking to add one.

Clearly, plan sponsors are viewing their recordkeepers as commodities that, like utility companies, are essential but show little differentiation. Plan sponsors are realizing that advisers, not providers, are most likely to move the needle on participant preparedness for retirement.

While it is obvious to most industry insiders, the market downturns of the past few years have highlighted the basic flaw in DC plans. In defined benefit plans, the company is penalized if the funds perform badly or fees are too high, so plan sponsors are very careful in their choice of vendors and advisers. But in DC plans, though the employer makes the buying decision, the participants pay the price if the fees are too high, the investments are poorly chosen or if the adviser is not experienced.

Though the auto plan features of the 2006 Pension Protection Act tried to alleviate some of the problems through automatic enrollment and equity-based default options, people prefer to work with someone they trust when it comes to investments and retirement planning.

So while the platform or recordkeeper must offer all the right features, services and investments, advisers are the ones tasked with pulling the right strings to design and implement a plan that works for participants.

With more than 80% of DC plans with under $100 million in assets using an adviser, up from 75% at the same time last year, sponsors are realizing that having an impartial third party advising the sponsor and the participants is important. Though "blind squirrel" advisers still dominate the DC plans under management, they are slowly being squeezed out by qualified advisers.

Though fiduciary concerns had driven sponsors to look for experienced advisers in the past, participant angst about their account balances and their dimming chances to retire anytime soon has been a much greater impetus. Of the 20% of plans without an adviser, more than 14% are looking to add one. And with more than four times as many sponsors looking to change their adviser as looking for a new recordkeeper, sponsors are also realizing that only an adviser with the requisite experience can help.

Finally, the industry and Washington are starting to understand the real goal of DC plans, which have quickly become the retirement vehicle of choice. Though large amounts of money have been accumulated in DC plans, their effectiveness will ultimately be judged on whether participants are adequately prepared for retirement. Plan sponsors are realizing that while the recordkeepers, like utilities, must be strong and stable proving all the necessary tools and services, it is the advisers that will be most likely to move the needle on participant preparedness.

More than ever, sponsors are willing to meet with advisers, and those advisers that can show that they have the required experience, which translates into relevant plans and assets under management, will get an audience and most likely win more mandates than not. But, the adviser who can state that they can help a sponsor's participants prepare adequately for retirement, without causing the plan sponsor more work, expense or liability - and they have the data to prove it - will find themselves with more business than they can handle.

Ultimately, these same institutional advisers will have to learn retail skills as participants needing an individual adviser move into the distribution phase of retirement planning.