Growing tension exists between retirement plan advisors and record keepers as both expand into participant financial services. As defined contribution plan economics tighten — driven by declining fees, rising costs, and increasing service expectations — both sides are placing greater emphasis on higher-margin offerings such as managed accounts, rollovers, and wealth management.
Four distinct scenarios emerge: neither party offers participant services; only the record keeper does; only the advisor does; or both do — the last creating the greatest potential for conflict. Central issues include competition for participant relationships, data ownership and sharing, fiduciary oversight, revenue allocation, and ultimately who is best positioned to serve participants’ interests.
The “middle path” requires open, candid dialogue, clearly defined rules of engagement, fair compensation structures, and meaningful involvement from plan sponsors. As AI, data governance, and the broader shift toward participant-focused services reshape the defined contribution landscape, collaboration — rather than competition — will be essential to delivering better participant outcomes.
Read more in Fred Barstein’s latest WealthManagement.com article, “Is there a Middle Path in the Conflict Between Advisors and Record Keepers over 401(k) Participants?“
