While plan sponsors have wide discretion on how to use proceeds from forfeiture accounts including offsetting the cost of matches, a spat of lawsuits have been filed about the use of forfeiture accounts including one against the mega Wells Fargo plan questioning the process which could upend traditional practices and raise the cost of running a DC plan for sponsors.

Valued at a stunning $12.75 billion, Fisher pocketed a cool $3 billion from an Abu Dhabi related fund at an estimated +20 times EBITDA keeping the valuations and interest by PE firms in RIAs and, to a lesser extent, RPA firms, high. At the same time it was announced that  Fisher Investments will spin out $4.75 billion 401(k) business run by son Nathan Fisher.

While target date funds still rule the roost dominating QDIAs, the push towards personalization is making managed accounts more popular. They can also provide additional revenue for record keepers and advisors. Yet questions abound about the cost, which will appear high unless there is engagement, which might require leveraging data. Recent lawsuits against Empower by participants claim that the cost of managed accounts unreasonably enriched the record keeper while a lawsuit against TIAA survived a motion to dismiss regarding their managed account sales tactics.

The DC industry is under attack by a noted labor economist, The New York Times headline asked, Was the 401(k) a Mistake  and a Bloomberg columnist predicted the demise of 401(k) plans within the decade. While staunch DC professionals righteously defended the DC system extolling it’s virtuous design and stunning asset growth, some academics questioned whether the juice is worth the squeeze, which is an estimated 1% of GDP, and whether we are better off with a federal system boosting Social Security.

The RPA community waited anxiously to see if the Wood lawsuit against flexPATH would cause a run on lawsuits against advisors. Spun off in 2023 from NFP whose advisor had recommended flexPATH, flexPATH prevailed again v. Schlichter shortly thereafter.

Captrust has been buying up wealth advisors aggressively over the past decade but not until Creative Planning acquired Lockton’s retirement division with over $100 billion did RIA aggregators start paying attention to RPAs. The Mariner acquisition of Andco with $109 billion mostly in institutional DC plans catapulted another large RIA aggregator into the mix hoping to mine DC participants—expect others to follow.

Driven by state mandates, tax credits and PEPs, Cerulli predicts that 401(k) plans will increase 50% from 620,000 plans in 2021 to 980,000 in 2029. The impact will be more wealth advisors, who outnumber RPAs by 23 to one, will enter the DC arena as their business clients need help, opportunities to find wealth clients in plans will increase and, defensively, they may not want another advisor in the mix. All of which will drive the convergence of wealth and retirement, with Morgan Stanley’s James Gorman predicting that the workplace will become the firm’s No. 1 place to gather new assets over the next 10 years.

By overturning the Chevron decision, the U.S. Supreme Court favored courts over agencies to interpret ambiguous laws, which Justice Sonia Sotomayor in dissent predicted would create a tsunami of lawsuits— like we don’t have enough already.

Rather than appealing a Florida court’s decision to negate the old fiduciary rule in 2023, the DOL decided to create a new one, announced in April, which will become effective in September. Promoted by President Joe Biden in a rare retirement news conference, predictably, the usual suspects sued. Though the retirement industry generally approved of the new rule, which makes all advisors act as plan level fiduciaries, there was a strident outcry by the brokerage industry as the rule would effectively make all IRA rollover recommendations a fiduciary act as well as sales of annuities, placing a greater burden on insurance providers to oversee their agents. Will it cause more assets to stay in plan helping with retirement income adoption?

The job market has been on a tear for two years, though recently, it has cooled down to what some experts call equilibrium, which might, in turn, make the Fed more comfortable lowering interest rates as the unemployment rate edged above 4.0%. Regardless, the post-pandemic war for talent has caused plan sponsors to view their DC plans as a strategic, not tactical, benefit helping with recruiting and retention deploying more resources and support to the finance and human resources administrators. Beyond the Triple Fs (fees, fund & fiduciary), plans are looking for providers and advisors to help employees with financial challenges fueling the convergence.