News, Vision & Voice for the Advisory Community


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.

Jason Roberts: 'We know where the administrative hot spots are.'

The new San Diego firm will be a TAMP-like unit that gives a way for small companies to get big-plan leverage while still letting RIAs handle the investment advice, says CEO Jason Roberts.

a day ago by Lisa Shidler

A top ERISA attorney is co-founding a venture to crack the fertile but fallow small business 401(k) market by allying with RIAs.


David Gray: There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans.

The $12-trillion Boston firm shocked everyone with the timing of the 'seminal' move, the Labor Dept.'s tut-tutting 'guidance' not withstanding, after concluding Bitcoin's volatile days are behind it.

Friday, April 29, 2022 – 2:08 AM by Lisa Shidler

Brooke's Note: Pretty much come hell or high water the great capitulation to 'The Experiment' that is cryptocurrency has happened. Whether you're a teenager or a financial sophisticate, there's no turning back. Poverty is an option. Leaving an adventure like Bitcoin investing in the rear ...


David Solomon likes wealth management for its steady and predictable fees, and he's willing to pay transaction fees to get them.

The Chicago 401(k) robo-advisor became a ‘plug-in’ versus a ‘platform,’ relegating it to a guest role, a pragmatic move, yet, perhaps, diminishing its destiny.

Wednesday, April 6, 2022 – 4:48 AM by Oisin Breen

Goldman Sachs Asset Management is again the golden parachute for an RIA venture where the lead entrepreneur ran low on steam, the business model hit headwinds and the seven-year bell rang for private equity investors anxious to cash out.


Yoav Zurel: 'Advisors told us, information is great, but what I want is action'

The 10-year-old New York City firm nixed its FeeX brand and its old business model after RIAs said they wanted 'action' more than information.

Thursday, March 24, 2022 – 11:19 PM by Lisa Shidler

FeeX just raised $45 million but first it had to change its business model from an X-ray to a bridge and renamed itself accordingly. Big RIAs with a 401(k) bent are rewarding them with contracts.


Larry Fink: It's just a number.

After record AUM high, BlackRock chairman and CEO Larry Fink brushes off a milestone • SchwabSchwab hits records; Wall Street wants more • Mutual fund giant's ETF conversion yields bragging rights • Regulation Best Interest headaches unnecessary, despite SEC brouhaha, lawyers say • Workplace scheme wins big for Fidelity.

Friday, January 21, 2022 – 3:16 AM by Oisin Breen

BlackRock's AUM tops $10 trillion -- "It's just a number," says CEO Larry Fink with likely a nod and a wink.


Ric Edelman: I am carefully curating my sponsors.

The Mountain View, Calif., manager of $260 billion of AUM is splitting a two-hour slot in 25 markets between its namesake's new show and two ringers -- Jean Chatzky and Soledad O'Brien

Monday, December 13, 2021 – 7:45 PM by Lisa Shidler

Brooke's Note: I am not entirely sure what is going on here. At its peak, "The Ric Edelman Show" commanded a two-hour slot in 85 markets. Now its primary replacement show is one hour in 75 markets and does not include Ric himself. But Ric ...


Peter Mallouk: "This has the potential to be transformational."

Peter Mallouk's acquisition of Lockton and its big-company 401(k) business will double his Overland Park, Kan, staff and solidify its business model's rear flank

Saturday, November 20, 2021 – 4:07 AM by Lisa Shidler

Brooke's Note: The 401(k) business was drowning in its own stigma for decades -- deservedly so. It was a place of kickbacks, Enron-style abuses, low margins, low critical mass, dubious investments and crappy advice. That's all looking much different now with better laws, more critical ...


Mark McCombe: [We're] using our aggregation power to face off against the insurance company.

BlackRock has about $1 trillion of defined contribution assets while Fidelity and Vanguard both administer multiple trillions, so the New York giant is dangling defined benefits as a way to win the defined contributions game.

Friday, October 29, 2021 – 11:54 PM by Oisin Breen

Brooke's Note: The 401(k) system was launched with a wing and a prayer in 1978 as a free-enterprise experimental answer to the more socialistic systems that exist in Europe and the rest of the world. But the venture capital community turned up their noses and ...


Lori Hardwick: I prefer to be on boards where I am passionate about the company's mission.

Eying projected 300% plan sponsor growth, Aaron Schumm has promoted one executive, added another and reshuffled Vestwell's board, putting Hardwick on top.

Thursday, October 14, 2021 – 8:58 PM by Oisin Breen

Vestwell CEO Aaron Schumm just abdicated his chairmanship to Lori Hardwick as part of a senior executive team shuffle, after experiencing overwhelming growth in the workplace 401(k) accounts it services.


Aron Szapiro: Undoing this rule is key to mainstreaming ESG.

The Labor Dept. stops short of giving fiduciaries environmental, social and governance factor carte blanche but recognizes non-pecuniary factors are legit considerations.

Thursday, October 14, 2021 – 1:08 AM by Brooke Southall

Brooke's Note: There is no way to do business with a person or entity without trusting them. In fact, the more you trust your business partner, the deeper and more effective the business relationship can be. Constant verification is a giant cause of friction. It's time-consuming ...


Robert Johnson: “Our industry must safeguard against retirement plan leakage, which particularly affects black and brown workers.

The $8 trillion Malvern, Pa., asset manager signed a deal with Retirement Clearinghouse to address its $1.8 billion of record-kept plan assets, which suffer universally despised pension 'leakage' that drains minority-held accounts.

Friday, September 24, 2021 – 1:21 AM by Lisa Shidler

Brooke's Note: As a former telecommunications reporter, this article brought back all the head-banging stories I used to write about the insane advancement of dense-wave-division multiplexing. A wee wire could carry the whole Internet's traffic coast-to-coast in a nano second only to give back all those gains ...


Edmund Murphy III, ex-Fidelity, is using a blank checkbook from Great-West to buy every recordkeeping orphan but it still can barely see Fidelity's taillights across the $1.7-billion void.

Empower's $3.4 billion deal ups total assets to $1.4 trillion, a distant second to Fidelity's $3.2 trillion in administered assets.

Saturday, July 24, 2021 – 3:09 AM by Lisa Shidler

Robert Reynolds and Edmund F. Murphy III both left long careers at Fidelity Investments with an eye on recreating the magic of the Boston giant's retirement business at deep-pocketed Great-West Lifeco of Canada.


Aaron Schumm: We have a very clear path to profitability.

Wells Fargo's co-led the round of the New York City-based innovator, which hints it may follow Morgan Stanley, Voya Financial and BNY Mellon in being an investor that also becomes a customer

Tuesday, July 20, 2021 – 10:37 PM by Oisin Breen

Vestwell just raised $70 million in fresh venture capital, after tripling in the past year the number of retirement plans it shepherds for administration, compliance, recordkeeping and trust and custody.


Gaurav Sharma: We've been approached by a number of financial advisors.

With DOL all but outlawing RIAs from advising investors from rolling pension assets to IRAs, New York startup that specializes in the hand-off steps into the breach for RIAs.

Thursday, February 25, 2021 – 1:16 AM by Lisa Shidler

Brooke's Note: Maybe the mission and model of Capitalize simply makes too much sense to work. It wants to make 401(k) rollovers ... roll over, period. For more than two decades, I've heard that mission as a central problem in the RIA business, but no venture has ...


Jason Roberts: It can be bet-the-company stakes.

The Biden DOL is cool with surprisingly toothy rules it inherited that are sure to cause some RIAs to scramble and may be easier for broker-dealers to manage.

Saturday, February 13, 2021 – 2:29 AM by Brooke Southall

Brooke's Note: Fiduciary advocates may have wondered if the Holy Grail of having a federal rule that puts consumers interests ahead of advisor interests would ever make it out the door stamped by administrative approval. Well, it hasn't in so many words. But the wrinkle here is ...