Fidelity brings its 401(k) muscle to RIAs with new product
The 401(k) giant seeks to do for RIAs what it's done for brokers all along
Bill Sands
Is anyone really believing you can get free admin? Maybe if the plan had one participant. But most companies that look at bundled products are larger companies w/ a lot of employees. If anyone is getting paid hidden fees, it would be Fidelity. They’re getting paid…one way or the other.
Alison Farrin
It is getting easier to provide the basic service for close to free. But as always, the plan sponsor receives what it pays for. Generally these large “service” providers take whatever information they get from the employer, run the tests and report. So, the Plan Sponsor gets a test, a report and a 5500 – usually based on bad data in the initial submission. That works just fine until they are audited. Then all the issues become apparent and the Plan Sponsor looks for someone to blame, or closes the Plan citing administrative difficulties.
We joke about the retirement administration of one large payroll provider. They have a 100% failure record on correct ADP tests for plans where we have subsequently assumed administration.
They also provide “free” administration for their premier payroll clients. The clients that pay extra for the premier package….....
Phil Chiricotti
When digesting this article, your readers might want to note that the DOL does NOT have a set of enforcement regulations for RIAs. DOL regulations deal with fiduciaries. Anybody can be a functional fiduciary. Furthermore, RIAs/IARs may not be ERISA fiduciaries when serving a retirement plan. It depends on the services that are performed. Fiduciary status under ERISA is not the same as fiduciary status via securities licensing.
Related Moves
Christa Carone, an ex-Fidelity and Xerox marketing whiz, steps onto a slippery slope at LPL with a daunting task -- to consolidate a NASCAR size brand portfolio... or not?
With no CMO since August, the chief marketing officer will play catch up for a company still hungry to buy more branded B2B and B2C players.
April 2, 2024 at 1:28 AM
Joanna Rotenberg is departing Fidelity Investments after only two years, writing that she traveled 20,000 miles and successfully split her retail division into wealth and brokerage units
At her hire, analysts were adamant the head of Fidelity retail had 'big shoes to fill' to replace legendary Kathleen Murphy and her task of 'digitiizing' retail was no small ask
December 16, 2023 at 2:22 AM
Biz Briefs: The sorry scene at my local First Republic branch • Schwab launches new (smaller) lay-off round • Schwab hoovers pennies passing FINRA fee to clients • Gensler pleas for funds • Fidelity owner's private equity pres. retires • an Orion-Envestnet staff switcheroo • LPL dumps FutureAdvisor
Range Rovers screeched in and drivers joined a grim queue to get their cash, and cookie • The Schwab-TDA deal cull count now stands at roughly 3.5% of its staff • FMR's hockey star president has stepped down • SEC chief wants more enforcers • An Envestnet executive proves joining a rival is good business • LPL now has an in-house robot.
April 29, 2023 at 1:36 AM
Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees
The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors
February 17, 2023 at 2:49 AM
See more related moves
