A host of big-name banks and financial companies are jostling to provide retirement savings plans to small businesses, once the province of regional banks.

Large banks, Wall Street firms, mutual fund companies, and insurers are zeroing in on the market as a way to capitalize on two of the biggest trends in the economy: the aging population and the explosive growth of small businesses.

Fidelity Investments, which linked up with the U.S. Chamber of Commerce last year to provide small businesses with 401(k) plans, now counts 200 clients through that deal.

"This is just our start," said Guy Patton, senior vice president for emerging corporate markets at Fidelity Institutional Retirement Services.

Other big players to recently target the small-business market include BankAmerica Corp., PaineWebber Inc., and Massachusetts Mutual Life Insurance.

While many of the giants have long been active in providing 401(k) plans to big corporations, that field has become nearly saturated, experts say. So the players are naturally looking further down the market.

The small-business market is said to have been underserved in the past, though a number of regional banks provided 401(k) programs to customers. Now, with employment at small businesses rising sharply, the market is hard for purveyors of the plans to ignore.

"That's where the growth is," said Mary Malcolm, vice president in Chase Manhattan Corp.'s middle-market banking division and 401(k) product manager. Chase is providing 240 401(k) plans for businesses with fewer than 100 employees, she said. That amounts to more than $200 million of assets.

Meanwhile, Mellon Bank Corp., Wachovia Corp., and KeyCorp introduced their plans for small businesses last year. And Fifth Third Bank started its plan Jan. 1.

"Our customers were asking for the plans," said Michael Ryan, Wachovia's executive vice president for small business. "They have other banks and brokerage firms calling on them too."

Banks that have been in the field for some time are clearly feeling the heat.

"The market has been discovered, and people are figuring out how to make a profit," said Randy Haines, Compass Bancshares' city president for Birmingham, Ala. "We hope we can regain some of the market share we have lost to nonbank competitors."

The Independent Bankers Association of America teamed up with the mutual fund company Massachusetts Financial Services, Boston, this summer to offer 401(k) plans to community banks' small-business customers.

Bill Reid, president of the trade group's for-profit subsidiary IBAA Financial Services, said that fewer than 100 plans have been opened so far, but he expects the numbers to double within three years.

The 200 accounts Fidelity has gained via its link with the Chamber of Commerce have an average of 22 employees with few initial assets. While small, it represents a solid foothold in one of the most attractive growth markets for 401(k) plans and adds to Fidelity's base of 5,000 plans.

In the past, many providers wrote off small businesses as uneconomical to serve. But that thinking is changing rapidly. For one thing, technology has reduced the costs of managing the plans. Also, Congress last year reduced the reporting requirement for retirement plans for businesses with less than 100 employees.

And there are plenty of small businesses for providers to target. Less than a quarter of businesses with fewer than 100 employees had retirement plans last year, according to Spectrem Group, a research company in Windsor, Conn.

Spectrem estimates the potential market for small-business 401(k)s at 41,000 plans with $11.5 billion of assets. Although small businesses have fewer employees, they are more likely to participate in 401(k) plans. At small businesses that have the plans, an average of 83% participate, compared with 77% at larger companies, Spectrem found.

The market shares held by different types of providers are divided fairly evenly. Banks hold 28% of the 401(k) market for small businesses, compared with 29% for insurance companies, and 25% for mutual fund companies, according to Spectrem.

But some people are betting that banks will start pulling ahead.

Frank Lourenso, Chase's executive vice president for middle-market banking, said banks already have an advantage because they can market their 401(k) plans to current customers.

"Entrepreneurs want to sit down with someone they know," he said. "We have the whole relationship, and the 401(k) plan is just part of that."

Fidelity's Mr. Patton acknowledges that banks may gain customers who want the convenience of using one institution for all their financial needs or appreciate face-to-face interaction.

But Lawrence Kraus, the Chamber of Commerce's senior vice president, said banks do not promote their services as aggressively as other providers.

More brokerage companies, insurance agencies, and mutual fund companies have courted the organization's members in the last year, Mr. Kraus said. But no banks have called.

"Any large bank could offer retirement plans, but nobody has focused on the market effectively," said Charles Wendel, president of Financial Institutions Consulting.

Mr. Kraus said few companies were interested in providing 401(k) plans to the members - nearly all of whom have less than 100 employees - when the group first contracted for the service two years ago.

"A lot of them said there's no way you could make money in the small- business market, and they were all wrong," Mr. Kraus said. "Everybody wants to do it now."

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