A new NMG Consulting DC Advisor Insights study led by Joshua Dietch reveals that the convergence of retirement and wealth management is reshaping the advisor landscape. As fees decline and margins tighten, hybrid advisors—those offering both retirement and wealth services—are outperforming their peers, while retirement-only plan advisors (RPAs) struggle to maintain profitability. Among the 579 advisors surveyed, retirement specialists reported margins up to 15% lower than hybrids, driven by the shift from asset-based to flat-fee models and the higher cost of servicing smaller plans.
The study found that most RPAs focus on plans under $10 million and must evolve from plan-centric to participant-centric strategies to stay competitive. By expanding into participant education, managed accounts, and financial wellness programs, they can offset margin pressures and better meet client expectations. As 401k Marketing’s Rebecca Hourihan notes, “Focus on the people, not the plan.” Meanwhile, recordkeepers and asset managers are increasingly aligning with hybrid firms, recognizing their ability to integrate wealth and retirement advice into holistic workplace solutions.
Ultimately, the research underscores that hybrid advisors are best positioned to thrive as the retirement and wealth industries continue to converge. Firms that diversify their offerings, leverage technology, and prioritize participant engagement will be best equipped to sustain growth in an environment defined by fee compression, competition, and evolving client demands.
Read more in Fred Barstein’s latest WealthManagement.com article, “NMG Study: Hybrid Advisors Best Positioned to Leverage Convergence.“
