PLANADVISER - Spring 2023 - 14

A
Cover Story
STEP
D
efined contribution plan participants have continued
amassing wealth over the past decade, making them
an increasingly appealing target for the broader
financial services industry. As the recordkeepers have
quested after the participant to offer auxiliary services,
many advisers have begun to do the same.
Now, many retirement plan advisories are offering
wealth management services alongside what was once
purely retirement plan guidance to plan sponsors. In addition
to meeting a plan participant's need, the shift reflects
several broader trends within the industry, one being the
consolidation that is often bringing wealth management
and advisory firms under one roof.
The industry's embrace of financial wellness, which
recognizes that successful retirement outcomes require
that a participant's full financial picture be in order, is
another important trend driving the rise of wealth management
alongside retirement plans.
" As the industry has moved toward this more holistic
approach, it makes sense that advisers would be in both the
space of advising the employer and the plan as a whole on
its investments and how to run it, while also having a facet
of the practice that works with individuals both inside and
outside of the plan, " says David Kaleda, a principal in Groom
Law Group Chartered, in Washington, D.C., who specializes
14 planadviser.com | Spring 2023 | Participants
Art by Ryan Peltier
Today's business
model may add
wealth management
and other services-
how plan advisers
make it work
in aNEW
in the Employee Retirement Income Security Act.
Advisory firms are taking several different approaches
to their wealth management offerings. For example, some
provide participant services to high-net-worth participants
and partner with recordkeepers to support the smallerbalance
participants. Others offer services to all participants.
VARYING LEVELS OF COMPLIANCE
Whichever model they choose, advisory firms must be
careful to avoid perceived or real conflicts of interest, since
many wealth management services can create new financial
incentives for the firms. Regulation Best Interest requires
that firms document, identify and disclose conflicts of
interest to retail investors and regularly review their policies
and procedures to ensure they remain compliant.
" The level of compliance really varies by firm, " Kaleda
says. " Some are more rigorous than others, while some are
just trying to take more of a disclosure-only approach. "
SageView Advisory Group LLC, for one, has grown
its wealth advisory side and includes those with up to
$1 million in net worth-a group less apt to get help
from financial professionals because they may not meet
minimum thresholds. The firm now has about the same
number of staff offering such services as it does plan
advisers. Plan participants have access to point-in-time
D
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PLANADVISER - Spring 2023

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