Brooke’s Note: Joe Duran talks about how an oligopoly of a few big, branded national players will one day dominate the advisory business. Maybe we’re getting a little taste of what the United Capital CEO is talking about as CAPTRUST hits $85 billion (though its dated ADV states $68 billion) with this deal — and seems to only be gaining strength with size. Of course, the added twist is that the deal makes CAPTRUST more of a classic RIA in the sense that it’ll now be in a better position to do discretionary business with what its acquiree, Freedom One, brings to the table.

CAPTRUST Advisors LLC, one of the nation’s biggest 401(k) RIAs, has wrapped up a deal that has sent shock waves through the 401(k) industry. See: Cerulli: RIAs and hybrid RIAs make giant advances on banks and wirehouses in the 401(k) race.

The purchase of Freedom One Financial Group gives $85 billion Raleigh, N.C.-based CAPTRUST the added scale and fiduciary capabilities to make a bid for domination of the 401(k) business. The market powerhouse was recognized by RIABiz ...

Brooke’s note: Welcome to the second installment of our countdown of the Top 10 people who have had the biggest impact in the 401(k) business in 2012. As in the earlier part of the list, there are a few controversial picks, and these individuals all have their critics. But these are people pushing for new products and new legislative rules in the 401(k) arena to ultimately help participants. Typically our picks in these lists tend toward the meteoric mezzanine-level entrepreneurial companies. But some big companies and big-time bureaucrats are acting their size and making some big, impressive moves to reflect the cut-the-crap times.

5. J. Fielding Miller, chief executive of CAPTRUST Advisors LLC

CAPTRUST is often mentioned in 401(k) reports from Cerulli Associates Inc. as one of the premier RIAs specializing in the 401(k) industry. See: Cerulli report: Specialized RIAs likely to win middle-market 401(k) plan battle.

Although the Raleigh, N.C.-based firm has its own broker-dealer, about 99% of CAPTRUST’s business is fee-based. Over the course of the last five years, Miller has catapulted this firm from a boutique RIA to ...

Brooke’s Note: In 2012, RIAs were rightfully riveted by the 401(k) industry as the Department of Labor’s new fee disclosure rules went into effect. See: Fidelity tries out new DOL-influenced 401(k) fee disclosures on clients — and gets plenty of response. The level of industry interest can be gauged by our recent article, RIABiz’ 10 most-read stories of 2012: What fascinated you and why, in which fully half of the most-perused articles concerned the tax-deferred savings plans on which graying clients are pinning their retirement hopes. Some names on this list may strike you as controversial, but all these individuals, in their own way, exemplify the sea change going on in the 401(k) arena by virtue of their success, their embrace of regulatory change and their prospects for more of the same in 2013.

Our top five have now been released, too: See: 10 most influential individuals in the 401(k) industry affecting RIAs in 2012, Part 2.

10. Mike and Ryan Alfred, co-founders of BrightScope Inc.

The Alfred brothers have made waves in the 401(k) industry as Brightscope integrated SEC and FINRA data so ...

Dina’s note: Who’d have thought a topic as ostensibly musty as DOL regs could work up a group of usually calm and collected investment advisors into such a state? But judging from our analytics in 2012, that seems to be the case. Fully half of the stories on this list are devoted to the run-up to, implementation of, and fallout from the Department of Labor’s new disclosure fees for 401(k) plans. In trying to tease out other meta-trends, it’s instructive to compare this list to RIABiz reader favorites of 2011, which included existential headlines such as What exactly is an RIA? and Six things to know about how and where RIAs are growing. Still valid topics to be sure, but judging from the best-liked stories of 2012, the RIA industry has matured from an introspective adolescence into a more assured and forward-looking young adulthood. A note on methodology: In order not to be too “meta,” we’ve excluded two of the most-read stories of the year: The top 10 people in the RIA business in 2011 and The top 10 to watch in 2012. Look ...

Brooke’s Note: Companies do studies all the time but so often they ask the same questions, get the same answers and make it all seem like they’re going through motions. This study from Franklin Templeton seemed willing to get after real truths even if it would be hard to chart them on a graph. But the end result is that the study was interesting to read and presumably useful to practitioners.

When it comes to choosing an RIA to manage a retirement account, plan sponsors aren’t as interested in price — or slick sales — as advisors may think. In fact, a majority of plan sponsors say that price isn’t even a factor. The reasons they choose to hire a firm has more do with the right “fit,” which is along the lines of a popularity contest. See: Fidelity, Vanguard and Schwab have top 401(k) brands but plan sponsors like the service of off-brands better, study shows.

Last year, Franklin Templeton Investments hired an outside research firm Chatham Partners LLC in Waltham, Mass., to interview plan sponsors in the aftermath of an advisory search for their retirement ...

Plaintiff’s attorneys have become much more savvy and emboldened in their attack on 401(k) fees, and this has set the 401(k) industry on high alert that slews of additional 401(k) lawsuits are in the works.

Of more than 30 lawsuits filed since 2006, 17 — many of which were filed early on — have been dismissed, six have been settled and more than a dozen are pending. In the cases that were settled, employers and companies shelled out anywhere from $10 million to $18 million to plan participants. See: 9 things advisors to 401(k) plans must do to keep clients out of hot water.

The defendants have typically been employers and plan providers such as Fidelity Investments, but as RIAs continue their growth in the 401(k) market, industry leaders say they, too, will become targets. See: Fidelity, Vanguard and Schwab have top 401(k) brands but plan sponsors like the service of off-brands better, study shows.

Early on, attorneys simply attacked employers and plan providers for basic things such as using revenue-sharing and not outlining specific costs. In some cases, they even attacked the use of ...

Brooke’s Note: We all believe —- as certainly as that the sun will rise in the East — that the 401(k) industry will keep on with its various tax advantages. But are we all a little asleep at the switch? No political faction swears allegiance to the system that seems scrawny and star-crossed at times. With the government straining to find a politically palatable way to raise revenues, the 401(k) industry needs to stay wide awake or become a program that flew low and fizzled. At the CFDD conference in Chicago this week, the better minds in this part of the business are at full alert.

Regardless of who gets elected president, it’s clear that that there will be major tax deductions that will be wiped off the slate next year.

The 401(k) plan’s tax deduction is vulnerable, especially when stacked against the more popular education credit and mortgage deduction.

“This will be a heck of a fight,” says ERISA attorney Fred Reish of Drinker Biddle & Reath LLC. “There are some pretty incredible things that will be competing to keep their deductions against the retirement plan ...

A number of leading 401(k) industry ERISA attorneys have 'fessed up to the Department of Labor that RIAs, broker-dealers and others in the industry made mistakes in their fee disclosure notices, and are asking for a do-over in certain circumstances.

The attorneys are afraid that advisors and RIAs with good intentions made minor mistakes that could cause them to get hit with penalties and fines which could potentially wipe out their businesses. Attorneys say that mistakes are inevitable with the new fee disclosure rules, which affect 750,000 retirement plans and 125 million Americans, given the complexity of DOL rules. See: After years of DOL bluster, new 401(k) rules appear to make RIAs’ low expenses look higher than those of brokers.

Even though the DOL hasn’t started fining advisors, some in the industry have already recognized that they’ve made mistakes and are trying to find ways to fix them without getting steep fines. Under current rules an RIA who messes up its 401(k) fee notices could be forced to pay back all of the fees it had received from that plan.

The rules

Under the ...

Being sued or assessed monetary sanctions is an effective but expensive way for 401(k) advisors to become familiar with the Labor Department’s way of viewing things.

There’s a better way: learning from the mistakes of other plan sponsors and financial advisors.

Perhaps nowhere is this more true than in the nettlesome area of fees — hidden ones, excessive ones and ones that fit the revenue-sharing mold. A plan fiduciary needs to identify, understand and evaluate fees and expenses relating to plan investments and services. Accordingly, monitoring fees and expenses in light of the services rendered for the plan is a continuing fiduciary responsibility, one that has prompted a recent wave of lawsuits, regulatory guidance and Department of Labor enforcement efforts.

Lawyers steeped in the Employee Retirement Income Security Act of 1974 can tell you what the rule is but they don’t do due diligence or know the difference between a reasonable and unreasonable fee. They’re more reactionary. Reasonableness is a function of the marketplace. So there has been a wave of cases alleging excess fees.

Brooke’s Note: You could understandably be confused about who was winning and losing in the 401(k) business based on articles in RIABiz. We have written several of them talking about how the DOL is forcing disclosures that will wake up plan sponsors to the expensive, opaque and conflict-ridden bills of goods that have been sold by brokers over the years. We have written about companies like Brightscope that are facilitating that process. But then we also hear from other experts who say that RIAs are not really qualified to take on the complexities of the 401(k) business. We also hear how the new disclosures are too dense and complicated to be any better than the old ones for alerting unwitting plan sponsors. So amid all that back and forth, it’s nice to see some hard Cerulli-mined data about who is winning and losing. See: How a $12 billion RIA grew to $20 billion in less than a year by raiding 401(k) accounts from legacy players The theory that RIAs are — as caring and capable fiduciaries —taking their rightful place in the business is apparently not ...