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.


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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Andy Puzder takes a minimalist approach to the pensions of his workers.

Mum on DOL rule, Labor chief appointee Andy Puzder's 'check-the-box' 401(k) plan at CKE Restaurants speaks volumes

The expensive Mercer-advised pension plan has low participation rates, low balances, no matches and few assets overall

December 13, 2016 — 8:50 PM UTC by Janice Kirkel

Brooke's Note: Secretary of Labor appointee Andy Puzder replaces a very pro-DOL rule Thomas Perez. See: As President Obama takes the gloves off, pro-broker groups throw up 'sledgehammer' response. Puzder generally dislikes anything that'll trouble an employer. That's a concern unto itself for DOL-rule advocates. But ...

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The report provides answers that add some clarity but surely will displease most people in the industry.

One security lawyer's unvarnished take on DOL's 34 answers to 34 questions and what unsettles him about them

The 24-pages of government-speak only make a dent in comprehending the 1,000-page rule -- and the DOL says there's more guidance on the way

November 8, 2016 — 6:46 PM UTC by Irwin Stein

Brooke's Note: As a career securities attorney Irwin is a clear-eyed reader of DOL FAQs. He also has clear misgivings about the way that the Department of Labor is trying to interrupt the massive conflicts of interest built into the financial advice business in the United States.   ...

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David Barrer: I have relationships with recordkeepers and advisors that span my 30-plus years in this business.

With DOL wind at its back, Pentegra Retirement Services hires David Barrer to newly created TPA czar position to sail past its $11-billion AUM watermark

Barrer will apply his 32 years of ERISA retirement plan experience for dead reckoning navigation of 'yet to be determined' liability under the new fiduciary rules

November 3, 2016 — 5:45 PM UTC by Sarah O’Brien

Brooke's Note: If you seek hard evidence that our understanding of how the DOL rules will play out is soft, have a look at the whirlwind of personnel moves going on with ERISA experts being granted unprecedented power and opportunity. Andy Sieg replacing John Thiel at ...

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Mike Alfred (with brother Ryan, l.): It's pretty magical to get to build something from scratch and to experience the whole journey with family by your side.

Buyer scoops up BrightScope using Genstar capital

The once-brash Alfred brothers sought out Strategic Insight as the DOL rule comes thundering toward their 401(k) herd

November 1, 2016 — 2:11 PM UTC by Brooke Southall

Brooke's Note: Today 401(k) transparency is all the rage, what with the Department of Labor finding its inner outrage about the ways the free enterprise system twists our post-defined benefits pension system into a righteous knot. But before Phyllis Borzi woke up the bureaucrats we all just ...

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Mike Alfred (with brother Ryan, l.): It's pretty magical to get to build something from scratch and to experience the whole journey with family by your side.

Buyer scoops up BrightScope using Genstar's bucks

The once-brash Alfred brothers sought out Strategic Insight as DOL rule came thundering toward their 401(k) herd

October 31, 2016 — 10:04 PM UTC by Brooke Southall

Brooke's Note: Today 401(k) transparency is all the rage, what with the Department of Labor finding its inner outrage about the ways the free enterprise system twists our post-defined benefits pension system into a righteous knot. But before Phyllis Borzi woke up the bureaucrats we all just ...

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Wayne Bloom: Are you going to sit around and hope? You can't do that.

Commonwealth Financial to dump commission business for IRA and 401(k) accounts

Overcoming a 'challenging decision culturally,' Wayne Bloom pulls the trigger ahead of IBD rivals for his Waltham, Mass.-based broker-dealer

October 24, 2016 — 10:47 PM UTC by Brooke Southall

This article was updated with the comments of Ameriprise CEO to show what the exact opposite DOL attitude looks like at a broker-dealer.

Brooke's Note: This news broke late yesterday so I wasn't able to reach Wayne Bloom, who will take credit or blame for his company's ...

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Andy Sieg could preside over commission elimination for brokers handling non-retirement investments.

Using DOL as cover, Bank of America cuts the Merrill Lynch bull as it adds a robo, stops paying brokers to stick around and kicks John Thiel upstairs

The Charlotte, N.C.-based lending giant bagged the Wall Street beast in 2009 when the price was right -- now it's cutting off its traditional food supply

October 18, 2016 — 10:41 PM UTC by Brooke Southall

Brooke's Note: The question of whether Wall Street will ever reverse the decidedly one-way flow of assets from stockbrokers to RIAs comes down to whether it can overcome its own innovator's dilemma. In short, it has been more profitable to milk profits from the old transactional model than ...

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Aaron Schumm: I had the luxury of working with 100,000 advisors and hearing what they needed to help their business.

Two years after the $199 million FolioDynamix sale, Aaron Schumm jumps back in the B2B RIA game but not to compete -- yet

Staked to $4.5M of F-Prime and FinTech Collective cash, Vestwell will stay in 401(k) for now but roll its business model over soon enough to IRAs

October 4, 2016 — 6:22 PM UTC by Janice Kirkel

Brooke's Note: In covering the RIA business, we follow the money and we follow the people. We also follow the technology and the evolution of business models. In this article, we got to follow all four of those elements and that is what makes Aaron Schumm's new ...

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Mark Boyko: In the case of a long-term account like a pension plan, a money market fund will not withstand scrutiny.

In new wrinkle, ERISA complaint of Edward Jones employees centers on failure to offer yield-chasing money market alternative

The 401(k) lawsuit in the name of 38,000 participants resumes the parade of lawsuits against the giant broker-dealer based on revenue sharing arrangements

September 6, 2016 — 6:04 PM UTC by Irwin Stein

Brooke’s Note: We talk ceaselessly about the high, often ludicrous, fees charged for the active management of equities in portfolios. These fees, coupled with 12(b)-1 fees, end up at the center of discussions about fiduciary care. But banks and brokerages also quietly rack ...

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Matt Fellowes: You have annuity companies coming out with new tools and fund companies but there isn't a solution out there that is really different.

With a 'unicorn' as the stated objective, Morningstar hijacks its own venture founder, backs him with VC funding and sends him out into an annuity world

HelloWallet founder Matt Fellowes left his team with eyes on extracting profits from baby boomers looking to spend down their nest eggs

August 12, 2016 — 5:55 PM UTC by Lisa Shidler

Brooke’s Note: When you read about the founder of a company with the postmodern name of HelloWallet pocketing a righteous chunk of $52 million to found a new company that involves putting investor savings into annuities, it is tempting to ask why its name ...

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Sheldon Geller: It is the plan sponsor, not Fidelity, who makes the fiduciary decision as to whether to offer the investment advice service to their employees.

Delta employees sue Fidelity for 'illegal kickbacks' from Financial Engines

The case may turn on whether Fidelity, by acting as recordkeeper and administrator, qualifies as a fiduciary and therefore breached its duty as it accepted Financial Engines' advice fees

July 6, 2016 — 6:58 PM UTC by Irwin Stein

Irwin’s Note: Brooke is constantly telling me to report what I see and to keep my opinions to myself. But, having been a practicing securities attorney for more than 40 years, and since my opinion here is about other attorneys, he has given me ...

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Jeff Carney is returning to his US retail roots as Personal Capital board member.

Personal Capital gets $75 million investment and an ex-Schwab retail chief in Jeff Carney

The Bill Harris-founded call-center RIA, which manages $2.4 billion in assets, hits it $500-million bogey for valuation

May 19, 2016 — 11:30 AM UTC by Lisa Shidler

Brooke’s Note: Personal Capital adds to a growing correlation between the uptick in people predicting the demise of robo-advisors and the uptick in the amount of capital that they are able to raise. We have really yet to see any company that can even ...

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Bing Waldert: 401(k) plans are difficult [when it comes] to generating income. You can set up a withdrawal but only at a certain age. If you need to take out a big chunk because of a big medical bill, you can't do that.

Why luring 401(k) assets to IRA rollovers in a post-DOL-rule world remains child's play, which keeps $7.6 trillion in the IRA game and growing

Clients still hate 401(k) inflexibility around withdrawals and the DOL granted advisors the upper hand in getting clients to sign away protections with regard to pricier products

April 20, 2016 — 8:25 PM UTC by Lisa Shidler

Brooke’s Note: Sometimes the DOL rule hubbub gets so clamorous that we’re distracted from the nub of conflict. The Department of Labor declared that assets migrating from a 401(k) plan to an IRA account remain precious retirement assets that should be invested ...

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Edward Siedle: Overstaffing, underfunding, a lack of transparency and too much politics [are unacceptable].

The exit of CalPERS' turnaround CEO Anne Stausboll raises the question of whether the pension Goliath's changes are too little, too late and mostly superficial

Stausboll made a big showing of cutting hedge funds and other active managers but her last big act was to pay up for a New York office tower, funded by the sale of a diversified real estate portfolio

April 18, 2016 — 8:12 PM UTC by Irwin Stein

Brooke’s Note: That cluck-clucking you hear in the wake of the DOL rule is the sound of chickens coming home to roost. The fowl began to scatter in 1978 when 401(k) system was put in place as a means of improving on state ...

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