Facing fierce competition and pressure on fees for both current and new clients, providers are pivoting to focus on plan sponsors’ growing interest in financial wellbeing.
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For the past decade, the retirement plan industry has felt the pressure to reduce fees. This has spawned from increased scrutiny from plan sponsors, consultants, and ERISA attorneys as a result of litigation and greater transparency. Recordkeeping and administrative fees have continued to decrease as they are often viewed as a commodity, and for many of the top providers, simply table stakes to earning an employer’s business. Additionally, plan sponsors and their consultants continue to push for open architecture investment platforms that have removed the recordkeeper’s proprietary investment products, an additional revenue stream in the past. These forces have led to pressure on revenue, increased caseloads for service teams, and provider consolidation. 

 

This material was created to provide accurate and reliable information on the subjects covered, but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation.

Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co., (Gallagher) is a non-investment firm that provides employee benefit and retirement plan consulting services to employers. Securities may be offered through Kestra Investment Services, LLC, (Kestra IS), member FINRA/SIPC. Investment advisory services may be offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Certain appropriately licensed individuals of Gallagher are registered to offer securities through Kestra IS or investment advisory services through Kestra AS. Neither Kestra IS nor Kestra AS are affiliated with Gallagher. Neither Kestra IS, Kestra AS, Gallagher, their affiliates nor representatives provide accounting, legal or tax advice.

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