The relationship between retirement plan advisors and recordkeepers has always involved some natural tension. But as both sides expand into overlapping territory, plan sponsors need to pay closer attention to where the lines are being drawn—and who’s really looking out for their interests.
A recent guide from Multnomah Group, an independent retirement plan consulting firm, takes a hard look at what the industry calls “co-opetition”—the blend of competition and cooperation between advisors and recordkeepers. The firm argues that for many plan sponsors, this dynamic has quietly shifted into something more concerning: co-option, where advisors become so dependent on recordkeepers that their independence erodes.
Over the past decade, large recordkeepers have moved well beyond basic plan administration. Many now offer managed accounts, wealth management and rollover services, and financial wellness platforms—areas that were once the advisor’s domain. At the same time, advisory firms—especially those backed by private equity—have been expanding into the same space, embedding retail advisors with institutional teams to pursue rollovers and demanding participant-level data to improve targeting.
The result is a blurred line. Advisors increasingly rely on recordkeepers for referrals, data, technology, and even marketing dollars and event sponsorships. When that happens, plan sponsors have to ask: Is the advisor acting as an independent fiduciary or as a distribution partner?
Independence matters because it affects how aggressively an advisor will benchmark fees, how objectively they’ll evaluate providers, and how hard they’ll negotiate on the sponsor’s behalf. When advisors depend on recordkeepers for revenue streams—whether through managed accounts, rollover referrals, or subsidized marketing—their incentives shift. Negotiating leverage weakens, participant costs can rise, and transparency declines. Conflicts of interest may be disclosed somewhere in the fine print, but that doesn’t mean plan committees fully understand them.
Recordkeepers are also making pricing harder to evaluate by bundling fixed accounts, managed accounts, and proprietary investments into their fee structures. For sponsors trying to benchmark costs, this lack of clarity makes apples-to-apples comparisons difficult.
The Multnomah Group guide outlines a fiduciary-only alternative: advisors who accept no revenue from recordkeepers, asset managers, or participant-level services, and who commit to full transparency on compensation. This model, the firm argues, provides the fewest hurdles in demonstrating loyalty to clients and participants.
Plan sponsors evaluating advisors or consultants should ask direct questions: Does the advisor receive any revenue, sponsorship, or marketing support from recordkeepers or investment providers? If proprietary services were removed from the equation, how would that affect recordkeeping costs? And how does the advisor document that all-in participant costs are being evaluated?
The term “co-opetition” may sound innovative, but sponsors should look closely at whether it’s masking conflicts that compromise independence—and ultimately shift costs to participants.
