The 401(k) record-keeping industry is entering a new wave of consolidation, with more providers expected to merge or exit in the next three to five years. Recent deals—such as OneAmerica’s sale to Voya at a steep discount—have intensified pressure on mid-tier record keepers that lack scale, proprietary products, or strong wealth-service capabilities. As fees continue to fall while technology and staffing costs rise, smaller and regional firms will struggle to compete, prompting many to consider selling. Advisors may not cause these exits, but they will feel the consequences when clients question their choices and competitors target plans in transition.
At the same time, competition across market segments is intensifying as providers and advisors increasingly vie for participant-level services. Only a handful of record keepers—like Fidelity, Empower, Vanguard, Voya, and Principal—have the scale to remain dominant, while others rely on proprietary funds, payroll integration, insurance offerings, or strategic partnerships to survive. With fewer viable buyers left and diminishing cost benefits from acquisitions, advisors must be strategic in choosing partners that are stable, unlikely to exit the market, and willing to collaborate without undermining advisor relationships.
Read more insights in Fred Barstein’s latest Wealth Management article, “How to Prepare for the Next Wave of 401(k) Record Keeper Consolidation.“
