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401(k) Real Talk Transcript for October 25, 2023

Transcript of Episode 82 of 401(k) Real Talk.

Greetings and welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at’s RPA Edge and CEO at TRAU, TPSU & 401kTV - I review all of last week’s stories and select the 5 most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real! 



Even before the fiduciary rule emerges from the OMB expected by the end of October, there’s a lot of debate between advocates from different constituents as to whether the DOL should even be weighing in about protecting investors especially with their checkered history in the courts.

So just as the convergence of wealth and retirement at the workplace is taking up a lot our industry’s mindshare, the question is who should be protecting investors, whether in plan or not - the SEC or the DOL never mind the IRS due to the qualified nature of DC plans.

Advocates for a rule sperate from the SEC’s Reg BI which is mostly disclosure based, note that insurance products likely to become more available in DC plans are not covered and the rule does not take into account the relatively unsophisticated DC participants who may need additional protection.

At the heart of the debate is the definition of who is a fiduciary, and when, especially important when a participant separates employment and has to decide whether to roll into an IRA or keep the money in the plan and who should be overseeing that activity, the SEC or the DOL.


Meanwhile, on the advisor M&A front, Goldman Sachs has officially come out and admitted what almost everyone else knows about their 2019 $750m acquisition of United Capital which included 90 firms at the time is a disaster.

Hoping to salvage something even though at a reported 1/5th the upfront price plus a potential backend, Goldman struck a deal with Creative Planning just as many United Capital firms who chafed under Goldman’s restrictions and what some called “micro-management” are jumping ship to independent firms like Prime Capital rather than join another large firm, like Creative, that espouses integration.

It is a cautionary tale that many banks which had acquired independent broker dealers or firms like Schwab have learned – advisors that seek independence do not thrive when micro-managed.

It’s a potential lesson for RPA aggregators who need to bring scale and impose enterprise solutions on the firms they acquire to justify the hefty price paid with PE money as well as figure out how to leverage participants through wealth services.

ERISA litigation continues with 58 lawsuits filed, settled and/or decided in Q3 alone according to a P&I report with no end in sight. Industries affected range from financial services to healthcare to universities to tech & telecom enterprises.

Smaller firms and advisors have yet to be targeted in masse though the industry eagerly awaits the Flexpath case with the trial of the 1st of 2 lawsuits completed and a decision out possibly by the end of the year. Those lawsuits likely caused the separation of NFP Retirement from Flexpath by their PE owner Madison Dearborn which coincidentally bought the CIT business from Wilmington Trust which powers flexpath, if you believe in coincidences, and could give pause as other RPAs that create proprietary or co-manufactured products and services

As a former member of the bar, I know that lawyers follow the money and many of the well-heeled firms like Schlichter Bogard have paved the way for others to follow and likely move down market with one firm rumored to be seeking settlement even before the lawsuit is filed.


BlackRock has launched what is said to be the first ever ETF target date series which confounded the DC industry when first announced. Standalone ETFs have not fared well in DC plans because they are hard to record keep and the industry did not see much the value over low-cost index funds.

It turns out BlackRock is targeting retail investors as a mass-customization play that is much lower cost that managed accounts. Certainly, DC participants who might be more representative of the average retail investors v. high net worth or mass affluent ones, have adopted TDs  though mostly through auto-enrollment. So perhaps there is a market especially for younger investors trying to build assets that may also be invested in TDFs in their DC plan especially with the growing popularity of ETFs over mutual funds in the retail market.


As many RPAs struggle and compete with larger providers over serving participants fueled by declining plan fees for both parties, is there a hidden alternative?

There are almost 200 independent mostly regional record keepers who will not likely compete with advisors but their technology, support and user front end has been inhibiting.

In my column this week, I review services offered by one tech fir, iJoin, which represents over 60 providers with 4 million participants not just willing to partner and share data with advisors, but also offering low cost managed accounts and engagement tools that can help advisors not only improve outcomes but help convert participants into wealth clients. Worth considering.


So those were the most important stories from the past week. I listed a few other stories I thought were worth reading.

Please let me know if I missed anything or if you have any comments. Otherwise, I look forward to speaking with you next week on 401kReal Talk.

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