When it comes to finding sub-advisory mandates, the size of the asset management firm is not a key consideration, according to a survey of 33 companies by Financial Research Corp.

FRC analysis also found that sub-advisory assets reached an all-time high of $1.7 trillion in 2010, with mandate changes reaching $100 billion, another record.

"We were surprised to find that smaller firms were in essentially the same position on the playing field as larger competitors when it comes to learning about mandate opportunities," said Lynette DeWitt, director of sub-advisory and lifecycle research at FRC. "Firms of all sizes learn of mandate changes in pretty much the same way, from the hiring manager. This wasn't the only channel. The fact that there are multiple ways of finding out about mandates is good news, especially for smaller sub-advisors."

What does matter to the hiring manager is overall performance. Hiring firms also give a lot of stead to existing relationships and affiliated sub-advisors.

GAO Recommends

Retirees Invest in Annuities

In a new report from the Government Accountability Office (GAO), experts recommended that middle-income retirees convert a portion of their savings into an inflation-adjusted annuity or opt for an annuity instead of a lump sum from an employer sponsored defined benefit plan. They also recommended that Americans delay taking Social Security benefits until at least full retirement age.

But that's not what most Americans are doing.

Only 6% of Americans retiring with a 401(k) or other kind of defined contribution plan chose or bought an annuity at retirement from 2000 to 2006.

Nearly 73% of Americans who become eligible for Social Security took benefits before age 65 from 1997 to 2005. Only 14% took benefits the month they reached full retirement age, which varied from age 65 to age 66. This means that nearly half passed up from 25% to 33% in extra monthly income they could have had by waiting.

U.S. Senator Herb Kohl, who requested the study, said, "This report shows that many Americans will need to save much more or work longer in order to avoid the very real risk of outliving their savings."

The report discussed proposals to encourage plan sponsors to offer annuities and provide estimates of lifetime annuity income on benefit statements.

However, the current annuity market doesn't seem likely to solve the nation's retirement problems. As the report notes, in 2008, if all IRA and other kinds of financial assets owned by those age 66 and up had been spent on fixed annuities, they would have covered only small portion of the group's household income.

And buying fixed annuities would be a big change in how Americans use insurance today. In 2009, sales of fixed immediate annuities for retirement came to $7.5 billion, only some 3% of total sales. Few people who buy deferred annuities, which can be converted to a lifetime income stream at a later time, actually do so. MME

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