The landscape of financial services is rapidly evolving, especially in the realm of wealth management and retirement plans. A key driver of this evolution is the Secure 2.0 Act, which highlights the growing emphasis on retirement coverage for American workers. This legislative shift presents a significant opportunity for wealth management advisors to venture into the retirement plan space. However, this transition is not without its challenges.

The Opportunity in the Retirement Plan Space

The Secure 2.0 Act, with its focus on enhancing retirement plans, opens up a tremendous opportunity for wealth management advisors. There’s an increasing need for professionals who can guide plan sponsors through the complexities of retirement plans. This opportunity is magnified by the long-standing trust and relationships that advisors have cultivated over the years with their clients. 

Challenges for Wealth Management Firms

Despite the apparent opportunity, wealth management firms face significant hurdles in adapting to retirement plan services. Many of these firms lack the necessary infrastructure and expertise, especially in areas governed by the Employee Retirement Income Security Act (ERISA). There is relatively little overlap in knowledge and skills between a wealth management advisor and the complexities and liabilities associated with retirement plan consulting, which is why firms have historically avoided it. This gap in knowledge and resources raises a critical question: Should wealth management advisors venture into retirement plan services unprepared, should they avoid this space entirely, or is there a better solution?

The Need for Specialized Guidance

The answer lies in understanding the needs of plan sponsors and plan participants. With over 90 provisions in the Secure 2.0 Act alone, the demand for specialized knowledge in retirement plans is more critical than ever. Advisors need more than just benchmarking or investment monitoring software. Retirement plans require a deep understanding and capability to effectively consult on them, and technology alone cannot solve for that. 

The Role of Recordkeepers

Recordkeepers have traditionally played a significant role in servicing retirement plans. However, due to fee compression and the subsequent drive towards automation and self-service, their role has evolved. Today, much of the service responsibility has shifted to plan sponsors, leaving a gap in personalized, expert guidance.

The Risks of Inadequate Preparation

Entering the retirement plan space without adequate preparation can be likened to an inexperienced individual piloting a large aircraft. Would you get on a flight from Los Angeles to Hawaii with an individual solo in the cockpit who has never flown a plane, trained for it or even sat in a cockpit? It’s a risky proposition, one that could potentially jeopardize the financial futures of plan participants and expose liabilities for plan sponsors. This analogy underscores the critical need for expertise and proper preparation in retirement plan consulting.

Proposing a Solution

The buzz word of convergence is hot right now but it isn’t as simple as a wealth advisor say yes to the opportunity. The industry must develop effective solutions to support wealth management advisors in this new endeavor. This support shouldn’t rely solely on technology; it must also encompass understanding, expertise, and a robust service model. Partnerships with firms specializing in retirement plan consulting could be the key, but very few specialist firms were built to support such a model. A combination of technology, automation, and strategic partnerships can create a synergistic approach, beneficial for both wealth management advisors and their clients.

Don’t forget about the Participants

Not only do plan sponsors need expert consulting, but participants also need help now more than ever. Participants with a balance over $500,000 have no issue getting assistance from financial advisors at almost any firm. But what about the large majority with balances under that figure, who are often lost and forgotten within a 401(k)? This is where solutions need to be enhanced to engage participants with personalized messaging and offer the opportunity for support.

The Path Forward

To make this partnership successful, both parties must be aligned and transparent in their goals, services, and expected outcomes. This approach will enable retirement specialist firms to assist wealth management advisors in elevating service standards for underserved plan sponsors and participants.


The convergence of wealth management and retirement plans is more than just a trend; it’s a necessary evolution in the financial services industry. By embracing specialized knowledge, leveraging strategic partnerships, and focusing on service models that address the complexities of retirement plans, wealth management advisors can successfully navigate this new terrain. This approach will not only benefit their business but will also ensure that American workers receive the guidance they need for a secure retirement.