401(k) Advisors, Record Keepers Urged to Share Participant Revenue as $1 Trillion Leaves DC Plans Annually
Updated
Updated · Wealth Management · Jun 15
401(k) Advisors, Record Keepers Urged to Share Participant Revenue as $1 Trillion Leaves DC Plans Annually
3 articles · Updated · Wealth Management · Jun 15
Summary
A new industry analysis argues 401(k) advisors and record keepers should jointly serve participants, saying collaboration can improve retirement outcomes while opening new revenue as plan-level fees decline.
Cerulli data cited in the report shows participants still want human guidance: 68% are confident about retirement, yet only 30% have a financial plan, and provider tools often go unused.
The proposed split plays to each side’s strengths—record keepers bring scale, call centers, data and technology, while advisors provide personalized advice and fiduciary oversight that plan sponsors have historically favored.
The revenue case is sizable: about $1 trillion rolls out of defined-contribution plans each year, and Empower estimates participants hold $3 outside the plan for every $1 inside it.
The report says partnership is especially suited to hybrid retirement-plan advisory firms and 'partner' providers, framing the workplace as a key channel for finding the next generation of wealth clients.