Lisa Shidler

Congratulations to Fidelity for its market leadership.

It just goes to show that the industry is not so insular it can not adapt. With the inconvenient truth of transparency, when it is in the industry’s enlightened best interest to act in the best interest of the investing public, it will adapt.

The professional standing of the advisor is advanced, the broker is aligned with the consumer’s best interest, the plan sponsor does not have to worry about conflicted advice for which it is accountable, plan participants are far better served. A win/win/win/win/win !!!.

Now will the brokerage industry follow for taxable accounts?

SCW

Fidelity Investments puts hard numbers on the disgruntlement of 401(k) plan sponsors -- and launches Z shares with ETF-like prices

Jordan Burgess: This information has been well-received by advisors.

Schwab

Cerulli

Fidelity Investments

401khelpcenter.com

Penniall

Bernie Clark

Craig Watanabe

Bing Waldert

Rick Meigs

Jordan Burgess

The days when RIAs were the outsiders at the 401(k) party are fast coming to a close. What's new is that the mass of 401(k) assets 
is getting critical at about $3 trillion; fiduciary advisors are getting appreciated; fat fees and questionable kickbacks are getting exposed and stepping out of line is getting dicier as the Department of Labor tightens the regulatory screws.

The old reasons why the 401(k) business is attractive are still in place: there are fresh assets pouring in every month and when employees leave jobs or retire, they produce rollovers that build up IRA accounts for financial advisors. The drawbacks of getting into the 401(k) business are still in place, too. Dealing with retirement assets is really a second line of business and it remains -- unless you overcharge with hidden fees -- a low margin business with high potential fiduciary liabilities.

Still, the outsourcers, infrastructure and accumulated knowledge for RIAs to capitalize on is growing daily and a the mega-shift of assets away from brokers is making the 401(k) business riskier and riskier -- to ignore.

401(k) Stories

A look at the numbers shows that exchange traded funds are starting to move in lockstep with RIAs and vice-versa. RIAs invested $496 billion in ETFs in the 12-month period ended June 30, 2015 – that’s a $78 billion increase compared to the same period the year before. By comparison, the wirehouse channel added 20% fewer ETF assets, or $397 billion in the last year; granted, an amount that was $70 billion greater than its aggregate investment during the same 12-month period the year before, according to Broadridge Financial Solutions. RIAs that manage portfolios and make discretionary investment choices for their clients value ETFs because they provide advisors with easy access to market segments at a cheap price – an especially important factor for RIAs who are compensated on an asset-fee basis. Fee-based advisors appreciate ETFs’ tax efficiency, liquidity and broad exposure at low cost. Conversely, RIAs are a prized channel for ETF-makers like State Street, Invesco, PowerShares, Vanguard Group and BlackRock. ETFs are also a major ingredient in portfolios devised by robo-advisors -- essentially automated RIAs -- for the mass affluent who invest more than 90% of their assets using ETFs.

ETFs

Advisors are gaining some ground but the crunch of fees and service on plan purveyors gets worse and worse

Fidelity Investments puts hard numbers on the disgruntlement of 401(k) plan sponsors -- and launches Z shares with ETF-like prices

Stephen Winks

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Fidelity Investments puts hard numbers on the disgruntlement of 401(k) plan sponsors -- and launches Z shares with ETF-like prices

Stephen Winks

Related Moves

May 1, 2025 at 1:47 AM

January 11, 2025 at 3:01 AM

June 7, 2024 at 11:17 PM

May 25, 2024 at 2:45 AM

RIABiz Directory

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