Lisa Shidler

ERS has an all star cast Bob Ward, Bob Padgett, Gib Watson, Chip Clayborne, who are uncommonly entrepreneurial, accomplished and focused on 401(k) space, unlike large slow moving competing organizations tied to an outmoded business model presently in the space. The unique dynamic of advising individual plan participants which has not been addressed (except by fast growing CapTrust now at $130 billion) portends of a magnificent opportunity. Scale, high level participant counsel and margins at the advisor level in the 401(k) space have proven not to be easily achieved. This is a very complex market segment for the individual advisor to profitably master. If anyone can do it, this team of talent can.

SCW

Envestnet turns its guns on the 401(k) business

Gib Watson: A lot of these challenges revolve around fragmented data.

HighTower

Envestnet

Envestnet Retirement Solutions

Alerus Retirement Solutions

Fiduciary Plan Advisors

Bill Crager

Chip Roame

Matthias Kuhlmey

Gib Watson

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

Outsourced investments are one of the fastest-growing categories in the financial advisory world. Perched between
the asset custodian and the financial advisor, these (mostly) turnkey asset management programs can handle all or a 
portion of their investing, technology and fiduciary duties.

Advocates of using these TAMPs point to how it's better for the advisor because it frees up more time to spend with clients and prospects. It's also better for clients because the duties are being handled by specialized professionals who benefit from economies of scale.

Skeptics say that it adds a layer of cost and takes away an element of control from the advisors in executing according to a client's financial plan.

TAMPs

With a 57% stake in a new venture, the Chicago SMA supermarketer tackles a second TAMP gusher

Envestnet turns its guns on the 401(k) business

Stephen Winks

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Envestnet turns its guns on the 401(k) business

Stephen Winks

Related Moves

February 24, 2024 at 3:33 AM

January 9, 2024 at 4:09 AM

September 27, 2023 at 2:48 AM

January 7, 2023 at 1:50 AM

RIABiz Directory

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