Roughly half of America’s workforce lacks access to a retirement plan—and the majority of employers not offering plans are small businesses. According to the U.S. Census Bureau and the U.S. Small Business Administration, there are approximately 33.8 million small businesses in the United States, including more than 5.3 million employer firms with fewer than 100 employees. Despite their critical role in the economy, retirement plan adoption among these businesses remains strikingly low. In fact, a 2023 Small Employer Retirement Survey by the Employee Benefit Research Institute and Greenwald Research found that over half of these small employers do not offer any retirement plan at all. While this “coverage gap” presents a significant challenge to retirement security, it also represents a timely and compelling opportunity for financial advisors to add value and grow their business.
The Challenge: Access and Awareness
Despite the 401(k) being a staple of corporate benefits for decades, retirement plan adoption among small businesses remains frustratingly low. Many business owners overestimate the costs, complexity and time required to set up and manage a plan. Others wrongly assume their employees prefer wages over benefits. The reality is quite the opposite—retirement plans are increasingly seen as essential in the battle for talent.
State mandates in places like California, Illinois and Oregon are beginning to drive awareness, with some employers adopting auto-IRA programs simply to meet compliance requirements. But these solutions are limited—there’s no employer match, low contribution limits and little customization. That opens the door for advisors to position more robust solutions that better serve both employer and employee needs.
The Opportunity: Be the Expert
This is where advisors can shine. Business owners need trusted partners to guide them through the evolving retirement landscape—and many are actively looking for that guidance.
Here’s how advisors can lead:
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Demystify the Options
Advisors can walk clients through the differences between auto-IRAs, SEP and SIMPLE IRAs, pooled employer plans and next-gen 401(k)s. The key is translating complexity into clarity and making plan adoption feel manageable—not daunting. -
Maximize Tax Efficiency
With tools like predictive plan design and Secure 2.0 tax credits (up to $5,000/year for three years), advisors can illustrate tangible financial benefits. Framing the conversation around tax reduction—not just retirement—can make all the difference for an owner skeptical of benefit costs. -
Leverage Turnkey Technology
Digital platforms allow advisors to provide side-by-side plan comparisons, streamline onboarding and offer real-time analysis of plan design choices. This enables advisors to scale their service model and deepen relationships with business clients. -
Extend the Relationship
A retirement plan is often just the beginning. As businesses grow, they face new needs—capital strategies, executive compensation, succession planning. Advisors who earn trust through plan implementation are well-positioned to become long-term partners across multiple financial decisions. -
Promote Employee Financial Wellness
Beyond compliance, cost and retention, retirement plans are central to employee satisfaction. Advisors who help business owners support their teams through robust education and accessible plan features create wins across the board.
The Bottom Line
The convergence of state mandates, federal incentives, rising awareness and improved technology has created a once-in-a-generation opportunity for advisors to lead on retirement planning for small businesses. It’s a rare alignment of public policy and private sector need—and those who step in now will be rewarded with deeper client relationships and a growing book of business.
For advisors ready to act, the message is clear: Retirement readiness is no longer just a large-plan conversation. The small business market is open—and it’s time to lead.
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