Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for WealthManagement.com’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
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Read the full raw transcript below:
Greetings & a warm welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at WealthManagement.com’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV – I review all of this week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real!
First story:
Undercutting Trump’s claim of a booming economy, the August employment numbers fell to just 22,000 new jobs after a disastrous July and downward revisions of May and June leading the firing of BLS’ commissioner claiming that the numbers were rigged to make Trump look bad.
Unemployment rates reached a 4 year high and revised June numbers showed a loss of 13,000 jobs, the 1st loss since 2020.
The administration’s tariffs, immigration policies and government cuts have led to the weak job market with employers reluctant to hire during uncertain times with costs spiking and expected to surge as more tariffs take effect.
As a result, employers are cutting back on healthcare spending less concerned about recruiting asking their HR and benefits staff to do more with less. All of which could result in more focus on retirement plans which requires less spending though organizations will be looking to outsource more of the work continuing to focus on retention of high value workers.
Next story:
After selling NFP to AON for $13.4 bn just last year, PE firm Madison Dearborn is buying back the wealth and retirement divisions with AON focused on risk and human capital services.
Though not specified, it is believed that NFP retirement is included in the $2.7 bn buyback which includes $60 billion AUM from wealth divisions and $500 bn AUA likely from Fiducient and NFP Retirement all of which yielded $127m in EBITDA.
So while other firms are racing to convergence of wealth, retirement and benefits at the workplace, not AON who continues to be a big player in the institutional retirement market even after the divestiture.
Dating back to the spinoff of RPAG and flexPATH from NFP in 2023, the lift out of what is now Great Gray from M&T Bank last year and the subsequent “sale” of RPAG to Great Gray with just a minority interest in flexPATH, Madison Dearborn has created a very interesting and powerful if not conflicted entity which now includes retirement, wealth and CITs.
Next story:
Gusto acquired Guideline for an undisclosed amount validating the fintech business model as new plan formation explodes with payroll providers critical players.
Though Gusto was the major supplier of Guideline plans, they accounted for only about half leading to questions about how other payroll partners will feel about their clients being serviced by a competitor.
More to come as the industry prepares for the tsunami of new plan formation.
Next story:
The 11th annual Wealthies Award dinner concluded last week celebrating providers that support financial advisors.
RPA providers recognized at the Wealthies included Financial Finesse, Nestimate, Nuveen, OneDigital, Penchecks, Raymond James and Vestwell. Congratulations to all the winners and thanks to WealthManagement.com for recognizing RPA leaders and the momentum behind the convergence of wealth and retirement at the workplace.
Next story:
Speaking about convergence, Manulife John Hancock announced a partnership with Pontera to allow advisors to manage their clients’ held away accounts becoming the 1st major record keeper to formalize a relationship.
At the same time, Pontera is still “banned in Boston” by Fidelity with some speculating that the record keeper wants to manage the accounts themselves and are less concerned about cyber security.
As convergence heats up, so will the competition between advisors and record keepers with those that really want to support advisors like Hancock allowing them to manage clients’ accounts on their platform.
Finally:
The major themes discussed at the 7th Annual RPA Broker Dealer Roundtable hosted by Broadridge before the Wealthies this past week included convergence and the explosion of new plan formation leading to thorny issues like how to handle data, competition between record keepers and advisors, and how to engage participants and wealth advisors.
Read my recent WealthManagement.com/RPA column about what the senior leaders at the most important and influential BDs had to say revealing what the future may hold which still has more questions than answers.
Finish:
So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:
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Empower and Vanguard dinged by SEC on managed account disclosures
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iJoin partners with firm that helps participants transfer and consolidate DC accounts
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Goldman buys stake in T Rowe to boost their alternative investment strategies
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In wake of Empower lawsuit, how should plan sponsors record keeping marketing to participants AND
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The case for including retirement benefits in total compensations statements
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.
#401k #Real #Talk #Episode #September