Why brokers from Nationwide, LPL, Merrill Lynch and others are giving RIAs a cut of their 401(k) action
RIAs and brokers alike are wary of the fox-in-hen-house effect but DOL is creating strange bedfellows
CFDD
Good article, but note that non-fiduciary advisors who outsource fiduciary services to leading 3rd party firms can cause headaches for their competitors, not for themselves. These services were designed and positioned to enhance the advisor’s value proposition while enabling advisors and sponsors to offload some risk. Contracts may vary, but these advisors and their sponsor clients are generally indemnified with respect to 3rd party lawsuits regarding fund selection and monitoring. Driven initially by small retirement plan providers and now the BD community, the trend towards outsourced fiduciary services is alive, well and will continue to grow. Small RIAs may also start to use these outsourced services. In addition to the vendor’s financial substance, becoming a fiduciary to a small plan is a risky business. When the outsourced 3rd party fiduciary services are teamed with the major players, i.e., Mesirow, Morningstar and Wilshire, advisors without these services, including small RIAs, could be at a competitive disadvantage. There are some very skilled RIAs serving the retirement plans market, but as market becomes more complicated, very few firms are fully capable of providing high level services. Small RIAs are unlikely to capture much of this outsourced business because they cannot compete with the financial substance, risk management committees, insurance coverage and organizational depth of the leading providers mentioned above. Unlike small traditional RIAs, these providers do not compete with non-fiduciary advisors. In addition to limited insurance coverage, small RIAs offering these services could also compromise their own insurance coverage.
Related Moves
Dan Arnold is gone as LPL CEO, but his leverage to negotiate a settlement is apparent as LPL tells SEC it is deferring exercise of 'automatic forfeiture' of some vested options
Analysts stunned, seeking further clarity from LPL on future leadership, are reassured by company that 'no further shoe will drop'
October 3, 2024 at 3:08 AM
Dan Arnold steps down as LPL CEO, under a cloud, effective immediately; Steinmeier steps in as interim CEO
Well-regarded, Steinmeier has been LPL's go to player, after he was promoted to chief growth officer in May
October 1, 2024 at 8:42 PM
Christa Carone, an ex-Fidelity and Xerox marketing whiz, steps onto a slippery slope at LPL with a daunting task -- to consolidate a NASCAR size brand portfolio... or not?
With no CMO since August, the chief marketing officer will play catch up for a company still hungry to buy more branded B2B and B2C players.
April 2, 2024 at 1:28 AM
Seven 'RIA' chief executives are stepping aside for CEO 'operators' as PE backers get 'trigger' happy in adverse market; here are their stories
Whether it's Edelman Financial Engines, SMArtX, Allworth or InvestCloud, the re-CEO-ing process follows a fat 2020 capital raise and thinner results in stormy financial markets.
September 7, 2023 at 9:46 PM
See more related moves
LPL Financial
RIA-Friendly Broker-Dealer, RIA Welcoming Breakaways, Advisory Firm
Top Executive: Dan Arnold
SageView Advisory Group, LLC
401k Plan Consultant, Advisory Firm
Top Executive: Randy Long
Pension Resource Institute, LLC
Compliance Expert
Top Executive: Jason C. Roberts
Fiduciary Law Center
Legal Services for RIAs
Top Executive: Jason C. Roberts