401(k) Stories

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.


Jason Crane: We pride ourselves on our ability to attract high-end talent when the need arises.

Amid its reports it'll get flipped, Ascensus makes exec hire number seven in six months

Bloomberg writes that the Dresher, Pa.-based recordkeeper roll-up seeks a buyer; no matter, Ascensus continues to hire, bringing aboard Todd Engman as its latest regional vice president for 401(k) sales in the Northern Regions.

October 9, 2018 — 7:22 PM UTC by Oisin Breen

Brooke's Note: If you are owned by private equity investors, you are pretty much for sale. And forget about the old seven- or eight-year cycle. In a hot market like financial advice, tweak, revalue and run is a good strategy. So Ascensus is reportedly ...

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Allison Brecher: In many cases, fees are buried, service offerings unclear, and administrative burdens cumbersome. The bill does not address any of these challenges.

Trump exec order on 401(k)s cuts restriction for MEPs but Vestwell execs counsel caution

Under ERISA-permitted MEPs, advisors can lump small employers into giant plans that battle big firms which is fine til you read the small print

August 31, 2018 — 11:30 PM UTC by Brooke Southall

Brooke's Note: As an journalist in September 2018, you want to catch Donald Trump doing something right to make real news. Man bites dog. So I was excited to see him sign an executive order that could do good things for unlocking a 401(k ...

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Aaron Schumm: [We want] to work with advisors versus displacing them.

Vestwell makes hard-charging payroll startup, Namely, its portal to win plan sponsors for RIAs and IBD reps it services

CEO Aaron Schumm is helping advisors get the benefit of feet already wedged in doors thanks to pervasive payroll service apps

May 22, 2018 — 8:13 PM UTC by Oisin Breen

Brooke's Note: It's never enough to invent software. You also have to make it fit into the business world and win accounts for its users that pay the freight. Aaron Schumm knows that in spades, which is why his Vestwell startup keeps making news ...

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Kristin Petrick: We do not promote this feature, but make advisors aware in case they have clients that have access to a TDA 401(k) brokerage window.

TD Ameritrade scores sweet exclusive deal with Vanguard that includes RIAs managing otherwise self-directed 401(k) accounts

To make up ground, Vanguard Group also partnered with Newport Group

May 8, 2018 — 12:40 AM UTC by Brooke Southall

TD Ameritrade Institutional will be the exclusive custodian to RIAs managing assets on Vanguard Group's recordkeeping platform who prefer more sophisticated choices and performance reporting.

The arrangement between the Omaha, Neb.-based broker and the Malvern, Pa.-based index giant, which involves transferring about $3 billion ...

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Aaron Schumm: With the technology there's so much to do.

Vestwell jets ahead and adds pilots on the fly to keep startup on course

Founder Aaron Schumm is dealing with the dilemma/windfall of business coming over the transom ahead of projections

March 26, 2018 — 10:10 PM UTC by Oisin Breen

Brooke's Note: The best advice I got before starting RIABiz was to just go ahead and start. Anything more than that is overthinking, the advisor said. Of course, that guidance applies to every startup -- that a seat-of-the-pants launch into the abyss can be the right ...

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Tom McGirr: If the market goes down 300 points and we get flooded with calls, we can have an in-depth discussion about risk tolerance.

Fidelity's bet on ultra-compliance with the DOL rule pays off big as 401(k) assets jump stunning $280 billion in 2017

The Boston giant also added staggering 1.6 million plan participants but here comes DOL rule's BICE and the need to come extra clean on all those in-house funds

March 16, 2018 — 5:41 PM UTC by By Lisa Shidler

Brooke's Note: The past decade has been tough on kings. Wall Street brokers and active managers have become fainter versions of their former selves. Other monarchs have actually extended their borders. Schwab Advisor Services still rules RIA custody. Vanguard Group dominates passive investing ...

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Stan Smith: There's no retirement channel for spreading 401(k)s to non-U.S. midsized companies.

Fidelity exec joins 401(k) robo he formerly serviced with hyper-micro mindset

Stan Smith becomes CEO of SaveDaily, which has been around since 1999, way under the radar

March 5, 2018 — 10:38 PM UTC by Dina Hampton

Brooke's Note: In free enterprise, they don't award points for degree of difficulty but if you venture into a market everyone else considers impossible -- and you succeed -- then you might get rich. Stan Smith quit his day job at Fidelity to go after micro 401 ...

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Jason Roberts: What blew my mind is it’s one thing to evaluate your policies when you need to adopt them in the future, but it’s another thing to bake them into your manual.

How Scottrade's 'pain'-seeking sales tactics and 'cut-and-paste' lawyering allegedly led to breaching a DOL rule

Massachusetts securities cops seized on DOL rule clause still under delay and seeded effects for brokerage business that are pervasive and lasting

March 1, 2018 — 1:08 AM UTC by By Lisa Shidler

Brooke's Note: Absurdly big, disruptive occurrences are invariably the confluence of multiple factors colliding at a single point. Scottrade was a seller caught behind the winds of change in the advice business and desperate to sell before it got blown back even further. Hungry to ...

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Jason Roberts: What caught me off guard is that Fidelity says it is going to give advice to plans and participants.

Why exactly Fidelity chose 2018 to levy visible .05% 401(k) surcharge on Vanguard funds

After an abrupt business model shift from recordkeeper to advisor, the Boston-based 401(k) king may be a leader in fee 'levelization' that encourages other fund firms to act

February 9, 2018 — 6:10 PM UTC by By Lisa Shidler

Brooke's Note: My advice: When the stock market drops 500 points, don't read much into it. When Fidelity's 401(k) division raises a price five one-hundredths-of-a-percent on a limited subset of new plan sponsors, read too much into it. So much has ...

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Roger Lee (r. w/Paul Sawaya): Rather than just sit on top of Fidelity, we took on a challenge that was a little bit bigger.

Unknown San Francisco 401(k) robo with famous backers gets $11 million more in VC funding -- and an interesting brand

With Y Combinator start, Human Interest, formerly Captain401, is only in its third year but 10,000 customers convinced Adam Nash, Joe Montana and Sequoia-, Accel-derived VC

February 8, 2018 — 12:10 AM UTC by Brooke Southall

Brooke's Note: Doing a robo-advisor startup in 2015 seems late so you'd better get the branding right. This little robo, Captain401, is checking every branding box. The first challenge is to find a founder who went to Harvard. Check. Next is for the fledgling startup ...

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David Root: It's a Pittsburgh story. It was a once-in-a-lifetime opportunity to try to take full advantage of our position.

How a $500-million Commonwealth rep became a $5-billion-plus RIA in two years and where Dynasty's M&A war on roll-ups comes in

After forming his own RIA, moving assets to Schwab and partnering with Shirl Penney's firm, David Root just kept M&A-rolling into 401(k) clover

January 19, 2018 — 8:19 PM UTC by Oisin Breen

Brooke's Note: Roll-ups are often their own worst enemies. Their ability to write checks to buy revenues is an awesome power but comes with the danger of getting drunk with that power and failing to maintain those assets profitably long-term. Now, roll-ups have a ...

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Rob Foregger: John Hancock is the first to do it.

NextCapital does $30-million VC round with a staggering objective that's taking shape first with John Hancock

Nearing 100 employees, the Chicago-based robo-advisor blurs 401(k) and retail asset distinctions by making advice factories out of investment product manufacturers

January 16, 2018 — 8:06 PM UTC by Lisa Shidler

Brooke's Note: When I caught up with Rob Foregger during the editing stage of Lisa's article he exuded an unhurried urgency when talking about cofounding his second robo-advisor from his Vermont home. See: Personal Capital gets $75 million investment and an ex-Schwab retail chief in ...

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Fielding Miller: We had it narrowed it down to Tamarac and Black Diamond.

CAPTRUST dumps Advent and Microsoft, flirts with Tamarac and Salesforce, then hires Black Diamond and Microsoft

As CAPTRUST switches gears from its $240-billion 401(k) business to its $6-billion wealth manager, it is forced to make mammoth and wrenching software moves

January 4, 2018 — 10:56 PM UTC by Lisa Shidler

Brooke's Note: J. Fielding Miller is one of the top CEOs in the RIA business, by assets, growth and organization. So when we found out he had to strip out his software last year from his $250 billion RIA and replace it, we wanted to ...

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Louis Harvey: One of the big things that RIAs had from day one was they could say they always put clients' interests first and now that argument is pretty much shot to hell.

How Merrill Lynch 'shot to hell' the RIA fiduciary citadel by casting its $7.5 billion fiduciary 401(k) unit as smaller, purer and more future-minded on paper

Despite FAS having fewer 401(k) assets than, for example, a single North Carolina-based RIA, CAPTRUST, the Charlotte-based Bank of America's brokerage unit has created a new competitive threat

December 16, 2017 — 12:20 AM UTC by Lisa Shider

Brooke's Note: If the decline of the wirehouse over the past two decades could be summed up in a phrase it would be "innovator's dilemma" -- the condition by which a giant, mature cash cow fails to reinvent itself -- even in the face of eventual ...

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Larry Raffone: At the very biggest Fidelity plans, they very much value the things that we offer.

Fidelity Investments (explicitly) enters 401(k) advice game -- then Financial Engines' shares plummet despite its 'Mutual Fund Store' RIA winning Boeing and Ford accounts

The Boston giant now offers non-discretionary advice to non-recordkeeping customers and Financial Engines cuts its prices, bleeding out Wall Street's belief in the firm

December 6, 2017 — 6:16 PM UTC by Lisa Shidler

Brooke's Note: We talk about Fidelity Investments having a "full stack" when it comes to the 401(k) business. But the Boston Big Boy has never stacked up to Silicon Valley micro-player Financial Engines when it comes to selling, arguably, the most value-added layer in ...

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