Lisa Shidler

'Paradigm shift' in 401(k) flows opens the DOL door for annuities in 401(k) plans and RIAs are split

Lou Harvey:

DALBAR

BrightScope

Searcy

Institute for the Fiduciary Standard

Francis Investment Counsel

Drinker

Biddle and Reath

Penniall & Assoc.

Lou Harvey

Knut Rostad

Phyllis Borzi

Craig Watanabe

Jessica Maldonado

Mike Alfred

Michael Francis

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.

401(k) Stories

In the wake of DOL and Treasury rulings, some fiduciaries, certainly not all, seem willing to give the oft-reviled instruments a chance 

'Paradigm shift' in 401(k) flows opens the DOL door for annuities in 401(k) plans and RIAs are split

Related Moves

April 30, 2019 at 5:25 PM

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