Independent 401(k) retirement plan advisors (RPAs) who focus only on retirement plans and avoid offering other services like financial planning or investment management are finding it harder to grow. While these advisors once promoted their conflict-free business model, this approach is becoming less effective as the retirement services market evolves. With fees for retirement plan services decreasing, plan sponsors now expect advisors to offer more, such as helping employees with financial wellness or providing tax and estate planning advice.
Advisors who don’t expand their services risk falling behind competitors who offer a broader range of options. Many wealth managers and other firms are adding services like payroll, HR, and cybersecurity to meet client needs. Technology and mergers are also transforming the industry. For independent advisors who stick to just retirement plans, staying competitive will be increasingly difficult. Without the ability to offer more services or access to the latest technology, these advisors may struggle to survive in a market that demands more.
Read more of Fred Barstein’s insights in his latest Wealth Management column, “Purist 401(k) RPAs Will Struggle to Grow.“
