Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for Wealth Management’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
Worth Reading:
Read the full raw transcript below:
Greetings & a warm welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at WealthManagement’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV – I review all of this week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real!
FIRST STORY
To expand beyond the +$1bn DC market, Edelman Financial Engines is partnering with ADP to provide unlimited 1/1 discretionary advice to participants in ADP plans along with 338 services.
Along with over $200 bn in managed accounts, mostly with larger plans, Edelman has a 90 person call center as well as over 300 mass affluent advisors, 140 Mutual Fund Store locations and a budding RPA practice. Overall, Edelman has over $300 bn and is well positioned to leverage the convergence of wealth and retirement at work.
Will be interesting to see how advisors on the ADP plans react.
Next story:
The DC dashboard created by DCIIA and Manifest using over 85 sources estimates that there are currently almost 1.1 million DC plans with 148 million participants and $14.5 trillion. Contrast that to Cerulli estimating over 1 m plans by 2029 and the ICI reporting $13.8 tr in DC plans as of Q1.
Other data includes matching and contribution rates, rollovers and roll ins.
DCIIA is the leading association for professionals working in the institutional market including consultants, providers, asset managers and related vendors along with plan sponsors and high-level RPA – they also provide research through their Retirement Research Council. Manifest providers participants with account consolidation services.
NEXT STORY
A recently released JD Power study indicates that participants greatly value provider mobile apps over desktop and mobile website though not for predictive tools.
The apps were rated based on design, performance, tools and content. BofA came out on top followed by Schwab and Vanguard with T Rowe and Fidelity tied for 4th. Good apps lead to more participant engagement either willing to leave assets with or roll assets into high performing record keepers.
Though making progress, the DC industry will not be judge against itself – consumers will rate them based on other financial and banking apps they use. Certainly taking 3-6 months to complete a rollover will not help.
NEXT STORY
Seven firms that support RPAs were recognized at the Wealthies which received 1392 nominations at the 12 annual sold out black tie event last week in NYC.
Winners that support RPAs included:
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Inspira as a service provider
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IRALOGIX focused on convergence
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Vestwell’s Aaron Schumm for corporate leadership
As convergence of wealth and retirement heat up, Wealth Management is the only media outlet that covers both RPAs and wealthy advisors. The recent RPA awards are a validation of the convergence as well as WealthManagement’s commitment to this market.
FINALLY
The retirement professionals at broker dealers and their partners which gathered at the 8th Annual RPA Broker Dealer Roundtable last week in NYC are in some ways best positioned to build the bridge to wealth maybe more than RIAs or even aggregators, but they also face steep hurdles. Most broker dealers have realized the opportunity to leverage the workplace to help their reps find new wealth clients. But issues with participant data collection and management are concerning requiring resources with legal and compliance departments slowing the process while some record keepers are not cooperating.
Read my recent WealthManagement.com/RPA column about how broker dealers are navigating the convergence serving both RPA specialists, hybrid wealth advisors and blind squirrels.
FINISH
So those were the most important stories from the past week. I listed a few others that are worth reading covering:
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Mariner commits $175 million to install 700 bots
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AI not replacing advisors as RIAs grow headcount
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Lawsuit against benefits broker USI recently sold to AON
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State Street searching for new DC head
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.