Urgent Shift: Wealth Advisors Target 401(k) Opportunities

In a notable shift, the financial advisory landscape is experiencing a significant change in its approach to defined contribution (DC) plans, particularly 401(k)s.  Once considered too complex and burdened with fiduciary liability, these plans are now actively sought after by the industry for advisor involvement.  The surge in DC plans, driven by government mandates, tax credits, and heightened competition for talent, has outpaced the capacity of traditional DC specialists.  Wealth advisors, who traditionally avoided such plans due to minimal margins and high liability, are reevaluating their stance, drawn by the untapped potential client base, especially among high earners.

This transformation is further fueled by the growing convergence of wealth, retirement, and benefits within the workplace.  Advisors are recognizing the significance of relationships, the ability to outsource tasks, and the need for strategic adaptations in response to changing regulations.  The age of the dabbler is giving way to a more dynamic and adaptive advisory landscape, where success hinges on embracing training, leveraging resources, and navigating the evolving industry landscape effectively.

Read more in Fred Barstein’s Wealth Management column this week, “401(k) Industry Sends Urgent Call to Wealth Advisors.”

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