401(k) Record Keepers Confront Fee Squeeze, Chase 100 Million Participants for Wealth Services
Updated
Updated · Wealth Management · Jun 8
401(k) Record Keepers Confront Fee Squeeze, Chase 100 Million Participants for Wealth Services
1 articles · Updated · Wealth Management · Jun 8
Summary
401(k) record keepers said falling plan and advisory fees are colliding with rising service demands, leaving the business at an “existential” crossroads discussed at the RPA Roundtable in Washington.
Over 100 million active participants are the industry's main growth target, with firms pushing wealth services such as advice, rollovers and IRA solutions to offset pressure on core record-keeping revenue.
Providers said price cuts stem from years of benchmarking, RFPs, index-fund adoption and fiduciary pressure from plan sponsors, while some fintechs said automation still lets them preserve margins.
The expansion push is complicated by advisor-provider conflict over who serves small-balance participants, leaving many workers unserved even as firms try to close retirement and financial-wellness gaps.
Policy pressure is also building: Mark Iwry said Washington is focused on the coverage gap, with a federal auto-IRA mandate seen as more likely than a public plan and costing about $2 billion to $3 billion a year.