Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for Wealth Management’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
Worth Reading
Read the full raw transcript below:
Greetings & a warm welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at WealthManagement’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV – I review all of this week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real!
FIRST STORY
While DC assets continue to climb up 11% in 2025 according to ICI, Morningstar is reporting that growth is heavily dependent on market conditions not plan formation or participants. If rollovers and other leakage were reduced by just half, DC assets would have increased by 27% since 2015.
Of the $49.1 trillion in retirement assets, IRAs led with $19.2 trillion followed by DC plans at $14.2 trillion – 401k plans finally topped $10 trillion. DB plans held $3.1 trillion with almost no growth since 2015 when they held $2.9 trillion while DC plans and IRAs grew exponentially more.
Record keepers and advisors alike are realizing the missed opportunities of an estimated $1 trillion rolling out of DC plans annually and McKinsey reporting that of the $46 bn in record keeper revenue from wealth services, $38 bn were from IRAs compared to just $16 bn in plan level fees.
Next story:
While the wealth and DC markets evaluate private investments, the CIO of Wilshire details what advisors and plans should be looking for and how alternatives need to evolve.
Due is part to the president’s executive order with new rules recently released by the DOL and with greenlights by the SEC, private investments see both wealth and DC plans as the major source of new assets going forward.
Wilshire warns that advisors need to have an institutional discipline which is perhaps why Hightower acquired NEPC and Cerity merged with Veras. The main criteria according to Wilshire should be suitability and sustainable especially when markets are volatile and liquidity issues arise.
Next story:
The February 2026 appropriations bill brought health care plans closer to the fiduciary standards that DC plans follow, especially around prescription drugs and pharmaceutical benefits managers. Like with DC plans, the sponsors must run the plans the participants’ sole interest.
New fee disclosure rules expected by the DOL along with increased litigation of health plans could recreate what has happened over the last 2 decades with DC plans. In one lawsuit, participants in a plan were alleged to be paying $6,229 for a drug they could get for $11-22 online or retail. Now that’s egregious.
NEXT STORY
The digital transformation of DC record keeper platforms is speeding up with an 87.3% increase in updates last year according to Corporate Insight. The 2 key focus areas were helping participants plan for retirement and improving website navigation while including new educational content and improving tools. The focus on cyber security continued along with modernizing the look and feel of websites and improving mobile apps.
Look for increased use of AI to help personalize the experience in 2026 along with tighter security and better mobile apps that mirror desktop functionality.
FINALLY
While the quality of record keepers and RPAs have dramatically increased over the past 20 years with many pretenders exiting, plan fees have declined precipitously unlike any other part of the economy.
Read my recent WealthManagement column about how and why this has happened and that perhaps it is both harmful and helpful.
FINISH
So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:
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SEC commissioner backs alts in DC plans
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401k Book of Averages reports that plan fees continue to decline
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American Century TDFs hit with a spate of lawsuits for underperformance
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Former EBSA chief explains why blurred roles of advisors and providers need more clarity
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UBS partners with Human Interest
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RIA valuations hit record highs
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.