401(k) Stories

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.


Fielding Miller: If we're not the fastest growing RIA out there, then I don't know who is.

Grandaddy $220-billion RIA 401(k) roll-up books new $20-billion deal but may have bought its way out of a growth plan

CAPTRUST did 26 deals in 10 years and finally the firm's old 'friend-enemy' partner, CapTrust was one of the few needle-movers left to make its last 10% inorganic AUM leap

September 11, 2017 — 9:45 PM UTC by By Lisa Shidler

Brooke's Note: What Fielding Miller has accomplished with (all-caps) CAPTRUST is nothing short of remarkable -- a $220 billion RIA roll-up in an industry where $50 billion is generally considered the high end of the scale. He even completed this act of inorganic growth organically. No ...

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The DOL told Judge Nelson to pause her findings on Thrivent because BICE may get mooted.

Why brokers can't exactly relax even after DOL promises, in effect, to drop BICE from its rule, then delays it 18 months

Attorneys caution DOL-weary execs that Department of Labor can't huff, puff and ramrod through a big change, and even a rule delay is fraught for brokers that treat it as a pure reprieve

August 29, 2017 — 9:12 PM UTC by Brooke Southall

Brooke's Note: The DOL has a long way to go and a short time to get there -- and it is short-staffed at the highest levels. The regulator is still living life without a head, namely it never got around to finding a replacement for ...

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Fred Reish: It may be that the broker-dealers will limit the advisors who can work with large plans.

To the surprise of some, Dept. of Labor grants get-out-of-DOL-rule-jail card to 225,000 firms that dabble in the 401(k) business

Without recent guidance, 401(k) specialists were set to devour one-off accounts held by brokers but new DOL rule guidance offers well-lit path to build toward a far larger 401(k) practice

August 15, 2017 — 12:54 AM UTC by Lisa Shidler

Brooke's Note: Until now, DOL rule mania centered almost exclusively around IRAs. Advisors and broker-dealers were rightly flustered because the trillions of dollars of lightly regulated retail assets in individual retirement accounts were dragged under heavy ERISA oversight written by the Dept. of Labor. But ...

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Jim O'Shaughnessy: LPL will allow us to give recommendations but you've got to make sure you're fully working in the RIA with compliance, supervision and that product recommendations are all under that umbrella.

LPL Financial's DOL-rule memo to reps implies deeper message: Become an RIA or stand down on giving rollover advice

The 'deep-pocketed' broker-dealer puts its Series-7 brokers on notice to forget about suggesting a rollover even as it gives its hybrid RIAs a strict protocol to stay out of trouble

July 5, 2017 — 8:02 PM UTC by Lisa Shidler

Brooke's Note: What LPL Financial does as the biggest IBD with a whole staff of compliance experts and an even bigger bench of outside attorneys and other consultants must not be considered casual in its intent. We took it seriously. Clamping down is always ...

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Bill Hamm: From what I’ve seen it can only bring positive changes.

LPL Financial lets go of David Reich to pull its crucial $135-billion 401(k) division into a central service and branding sphere

The head of the unit exits amid advisor chatter that the hyper-channelization of LPL sometimes makes six phone calls necessary when one would do

June 26, 2017 — 9:34 PM UTC by By Lisa Shidler

Brooke's Note: Every once in a while I pick up a phone call that was intended for my partner, Frank Noto, and it takes some presence of mind not to say: You'll have to call our advertising department; you've reached editorial. In the ...

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Larry Raffone: They can’t plan for retirement because today is getting in the way of tomorrow.

Power Player: Larry Raffone is racing to 'lock up' the 401(k) market by taking its robo head start and combining it with a semi-national RIA

One analyst calls Financial Engines' Personal Advisor a 'massive long-term opportunity' but the rollout is slow and details are scant

June 26, 2017 — 6:56 PM UTC by Mia Diamond

Brooke's Note: As we unveil the first in our "Power Players" in the RIA business series, we remind readers of the purpose of this exercise. True, it's a way to commend these individuals for positioning themselves and their firms favorably for a crack at leading ...

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Phil Fiore: It gave us the kick to make Procyon happen.

Triumphant Phil Fiore set to regain $8.4 billion of AUA that UBS stripped away by firing him in November

Reunited with former partners at newly founded RIA Procyon Partners, and despite a last-minute UBS lawsuit seeking a restraining order, the wirehouse veteran appears to be back in the driver's seat

June 19, 2017 — 2:00 PM UTC by Brooke Southall

Brooke's Note: Politics aside, I have marveled of late at how -- given time -- the system of checks and balances works under the U.S. Constitution. Its dynamism may only be exceeded by the free enterprise system. UBS can fire you one day but the ...

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Alexander Acosta: The Department does not require firms and advisers to give their customers a warranty.

Buried in 11th hour FAQs, Alexander Acosta finally zaps 'warranties' from the DOL fiduciary rule -- at least for June 9 implementation

The hyper-explicit fiduciary promises at Obama-era rule's heart survived multiple rounds of edits but quantity and specificity of language surrounding suspension of warranties suggests they'll eventually come back full force

June 2, 2017 — 6:19 PM UTC by Brooke Southall

Brooke's Note: In my time here in Maine, I have visited RIA offices and asked about the DOL rule, and one encounter I had this morning from a firm nearing $1 billion in managed assets was typical. In one spoken paragraph, a principal told ...

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Fred Reish: You need the data in your file.

DOL fiduciary rule's upcoming September surprise'll send brokers memo-izing -- or else -- says Fred Reish in Nashville to a spellbound room

The Drinker Biddle attorney's invariably even tone gained inflection as he spoke of how brokers can only invoke BICE exemptions to go off DOL script by zealous, proactive documentation

May 25, 2017 — 7:53 PM UTC by Graham Thomas

Brooke's Note: People say certain things, and in certain ways, in front of different people. It is perhaps the best reason, from a content standpoint, to attend a conference. Graham Thomas was -- full disclosure -- in Nashville as an RIABiz advertising executive but he took notes ...

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Jon Stein, flanked by Maureen Thompson of CFA and Betterment associate counsel Seth Rosenbloom, marking the envisaged starting day of the DOL rule.

After putting big chips on DOL fiduciary rule, Betterment hosts funereal event to mark the April 10 Go Day That Wasn't

CEO Jon Stein sat shoulder to shoulder with CFP Board and Consumer Federation of America guests and held court with CNNMoney, Wall Street Journal and Consumer Reports reporters

April 13, 2017 — 6:50 PM UTC by Janice Kirkel

Brooke's Note: Betterment is best known for its B-to-C robo. RIA types know it's an RIA business. But the New York robo's interesting side bet is its 401(k) platform that its founders claim to have built after they became so disgusted, as ...

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Josh Itzoe: If I’m large plan sponsor but specifically financial services and if I haven’t been sued yet I’m holding my breath.

Schwab employee 401(k) lawsuit taunts Chuck by using Vanguard as Exhibit A

The San Francisco giant is latest to get hit with legal scourge; Ameriprise and Fidelity already shelled out megabucks to settle claims that their retirement funds underperform and charge a lot to do it – but not Vanguard

March 8, 2017 — 6:34 PM UTC by Janice Kirkel

Brooke's Note: It is absolutely the case that being sued indicates no guilt. If you've ever been sued falsely, you know that a meritless suit is almost a crime unto itself. But bringing a lawsuit is expensive so we do at least presume ...

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Scott MacKillop: The real concern is that the rule will prevent the industry from charging retirement plan clients high fees and offering them conflicted advice.

The time is now for the investment industry to shed its shameless culture or pay a steep price

Enough feeble excuses and convoluted rationalizations for delaying the DOL rule

January 19, 2017 — 7:03 PM UTC by Guest Columnist Scott MacKillop

They stab it with their steely knives, but they just can’t kill the beast. -- The Eagles, Hotel California 

It’s a shameful sight.

For more than six years, forces within our industry fought tooth and nail to prevent enactment of the Department of ...

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Irwin Stein: Unless the advisor is in a coma, it is always an uphill battle for a client to question an advisor’s judgment.

A veteran securities lawyer takes contrarian stance that the DOL is still 'suitability' reworded, when boiling its 1,000-page 'rule' down to 16-page 'guide'

In prolix prose, the Labor Department's 'exemptions' sound like fiduciary exceptions; as poems, they sound like suitability-level loopholes

January 18, 2017 — 6:23 PM UTC by Irwin Stein

Brooke's Note: Irwin Stein penned one of our better-read articles of 2016: A veteran of securities law killed his weekend reading all 1,000 pages of the DOL rule -- and has a takeaway to share. Fortunately for us, I convinced him to kill ...

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Jay Hummel: I would put our rep-assisted phone service up against anyone in the business.

After leaving Envestnet, Jay Hummel pops up at American Century with a 21st century plan

The former 'thought leader' is moving three children to Kansas City to more rapidly move the old-line mutual fund company to action

January 4, 2017 — 7:06 PM UTC by Sarah O’Brien

Brooke's Note: The mother of invention is necessity and arguably no necessity is more urgent than that of legacy active asset managers as ETFs and robo-advice take command. The chief value proposition of these products is fiendishly clever: they are dirt cheap. But cutting costs is a loser in ...

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Peter Mallouk owns a $21-billion RIA already growing with organic ferocity. Then Tony Robbins shows up and whoosh.

The 10 RIABiz stories advisors connected with most deeply in 2016 and how hubris and humility ran amok in this didn't-see-it-coming year

How did Aequitas swamp CONCERT? Power outages at LPL, Cetera and Wealthfront? Adolescent robo problems? And was that Tony Robbins hawking his money book ... again?

December 28, 2016 — 5:54 PM UTC by Dina Hampton

Brooke's Note: Choosing which articles were of greatest interest to RIABiz readers in 2016 was easy because a Google robot  measures the final results of your reading output.  We then refresh your human memory about why the story was so irrestistible at the time. Big ...

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