401(k) Transcript of Real Talk for June 26, 2024

Hello and welcome to this week's edition of 401k Real Talk. This is WealthManagement.com's Fred Barstein Omnichannel RPA Contributing Editor & CEO at TRAU, TPSU & 401kTV – I Review everything from the past week's stories and pick out the most relevant and interesting ones offering an open honest and candid discussion that you wouldn't get anyway. So let's get real!

In what is likely to be their final and epic battle, The DOL defended its fiduciary rule in a Texas court, where the regulations go to die, against a motion for a preliminary injunction and to vacate the rule that prevents implementation with certain provisions that will take effect on September 23^st. Remember that the Trump administration did not protect the 2016 rule.

The agency argued that ERISA does not exclude coverage for insurance agents and that the new rule follows a 2018 case that overturned the previous iteration by being more modest in scope, noting that market realities are that insurance agents are not simply “sellers”.

The 2024 rule would cover all plan-level advice, which few argue, but the existential question is whether all financial professionals who provide advice or guidance to participants, whether related to the rollover or purchase of an annuity, they must act in the best interest of their client, which, by the way, is something people expect.

Dormant is the pending Chevron Supreme Court case, which allows courts, not agencies, to decide cases where regulations are inherently vague by eliminating agencies' regulatory authority.

In a case where the rich keep getting richer, P&I's annual survey of asset managers showed assets increased 15.6% driven by a 26.3% S&P rise led by Vanguard, Blackrock and Fidelity.

Driven by concerns about fees and rising litigation, the tide toward passive strategies continues as index funds not only grew faster, but also beat their respective active competition across categories.

Fees are the only thing investors can control, which makes the larger scale active managers, who can lower fees, more competitive, especially as CITs rise, as many large advisory firms and broker-dealers earn their partner list by looking for more than just asset management. which could lead to continued consolidation like the Putnam/Franklin deal.

In a move that shocked the RIA world, taking $3 billion off the table, Fisher Investments sold a minority interest in an Abu Dhabi fund that values the $275 billion firm at $12.75 billion, at a valuation of 20 times EBITDA. While likely not a benchmark for smaller firms, it shows continued interest for investment advisory firms especially from sovereign wealth funds, as an Abu Dhabi-linked fund bought 20% of CI Financial.

While considered an estate planning move, the capital infusion could signal acquisitions that Fisher has largely avoided. Although probably unrelated, there is rumors of change in their 401k Solutions group led by Nathan Fisher, who has grown their small market advisory division to approximately $5 billion.

of Rich finalists were recently announced with the Retirement Plan Support and Advisory Services categories climbing to eight categories as WealthManagement continues to be the only RPA media covering the convergence of wealth and retirement in the workplace.

Categories include: 401k Service, 401k Technology, Corporate Lead of Recordkeeper and Aggregate, Broker Dealers, Recordkeeper Support and DCIO and Retirement Income Services.

Congratulations to all the finalists and I hope to see you all at the Wealth Award Dinner on 5th September^th in NYC immediately following the RPA Mediator Roundtable, followed by the Aggregator program October 14-15.

For literally decades, the in-plan pension industry has been saying, “the time is now – things have changed”. However, there has been precious little buy-in from DC plan sponsors, participants, data custodians, and advisors. At the last meeting of 4th Annual RPA Retirement Income Roundtable and Think Tank expected from P&ICIOs and product managers from aggregators, recordkeepers, and broker-dealers, along with product manufacturers and connectivity companies gathered to ponder the question of how and when this industry will “be born.”

Major challenges remain, but so do the obvious opportunities with retirement income at the core of the convergence of wealth and workplace retirement. Read my latest WealthManagement.com column about how the industry is collaborating to bring needed assistance to DC participants as the DB-ization of DC plans continues.

So those were the top stories from last week. I listed a few others that I thought were worth reading: