Guest Columnist Robert J. Leahy

Good article. I have found that the reason most of these people continue to be carried on the roles of 401(k) plans is because of incorrect addresses. With the IRS stopping it’s letter forwarding program in mid-2012, what is the most efficient way of finding/communicating with these participants?

Wonderful article, Mr. Leahy. I’ve been in the retirement plan industry (educating and enrolling participants) for almost eight years now and it’s refreshing to read such a well written article on a topic that doesn’t get a lot of attention. I even learned a few things in the process. :) Keep articles like this one coming!

A four-step plan to cull 401(k) rolls of the accounts of terminated employees

Robert Leahy: Anytime you have participant inertia combined with plan sponsor apathy, things are likely to get bogged down.

fi360

Alliance Benefit Group

Robert Leahy

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

RIAs can step in and add immediate value to a plan by purging these accounts that drain time, add costs and compromise efficiency 

A four-step plan to cull 401(k) rolls of the accounts of terminated employees

the frank adviser

401(k) Educator

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