Brooke Southall

Bottom line after DOL bakes change into ERISA is it relented enough that plan sponsors can likely make ESG funds part of default option

Pension Resource Institute

Jason Roberts

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

Stung by most of the 8,700 commenters saying  the Labor Dept. was witch hunting ESG, it gave ground, saved face but may have created a fresh problem for a Biden administration looking to restore the status quo

Bottom line after DOL bakes change into ERISA is it relented enough that plan sponsors can likely make ESG funds part of default option

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