Both retirement plan advisors and defined contribution record keepers are racing to leverage relationships with plan participants to offer wealth services. A new source of competition is growing as more wealth advisors see opportunities to convert participants into wealth clients, and these advisors have significant advantages over both record keepers and RPAs.
A recent study with 500 advisors (presumably wealth advisors) by the Fuse Research Network shows that a majority are converting at least 6% of DC participants from plans they manage—those with more than $500 million have the highest rate of conversion at 17%. Sixty-five percent say converting DC participants into wealth clients is easier than traditional methods.
As fees decline, moving to flat rates and the demand for services, especially educating and advising participants, grow, RPAs that do not offer wealth are facing a harsh reality.
“Convergence is accelerating,” noted Joshua Dietch, partner at NMG Consulting, which released a study with 579 advisors last year. “Advisors have to decide which business they are in, with the Triple F business model unsustainable.”
The same is true for record keepers, as indicated by the 2025 McKinsey report.
But the Fuse report is stunning and could spell trouble for some RPAs and record keepers. Most wealth advisors are not hunting for new plan opportunities, instead leveraging relationships with existing clients who own or run a business, which is a huge advantage. Though not specialists with limited plan level resources, they can outsource to a TPA or record keeper and more broker/dealers like Edward Jones are offering increased support, while firms like LPL are actively encouraging their wealth advisors to work with DC plans. Those advisors who do are more profitable according to the NMG study.
Wealth advisors have greater expertise with financial planning and wealth management than most RPAs and record keepers, and have been adopting artificial intelligence faster. There’s also strength in numbers. According to a Cerulli report, just over 10,000 advisors have more assets in DC plans than wealth, with over 50,000 between 15%-50% and almost 200,000 with less than 15% willing to serve even the smallest plans because of their focus on wealth services.
With M&A reaching record levels in 2025, according to Echelon, buyers are in a better position to help their advisors leverage DC participants—their private equity owners are aggressively pushing their portfolio companies to grow leveraging the almost 100 million participants in DC plans, over 800,000 DC plans expected to explode due to state mandates, $14 trillion in DC assets and $1 trillion rolling over into IRAs last year alone.
“One of the things that leads us to believe this represents a significant acceleration is the increased activity we’ve seen around the convergence of retirement and wealth planning services,” Loren Fox, co-manager of Advisor Insight, FUSE Research Network’s advisor benchmarking service, said in a recent Wealth Management article citing the recent acquisition of Sageview by Creative Planning, which had previously acquired Lockton’s retirement division.
He went on to note that higher conversion rates are due to more DC plan sponsors now offering financial wellness programs to their participants. The programs allow advisors to engage directly with end-users, FUSE notes. Almost 60% of surveyed advisors said they give holistic advice to DC plan participants in one-on-one consultations.
Though only 9% of the advisors in the Fuse report work with more than 20 plans, and 26% do not work with any plans, all of that could be changing rapidly. The specialists are more proficient at plan-level services and avoid smaller plans. Record keepers that compete with advisors for participants and do not share data will be blacklisted by advisors and home offices.
Though it has not taken off yet, the convergence of benefits and retirement at work through the fiduciary and disclosure requirements in the Consolidated Appropriations Act, as well as the pending pharmacy benefit fee disclosure rule, could attract more benefit advisors, adding to the competition. And as retirement income continues to grow in plans and rollovers increase, those annuity brokers in insurance and independent marketing networks may see opportunities to leverage DC plans.
The DC opportunities are so immense that RPAs that offer and continue to grow their wealth and financial planning services through acquisitions, partnerships, technology and the hiring and training of financial coaches leveraging managed accounts to provide advice at scale will thrive even with the new competition.
Those RPAs that do not will struggle not just to grow but to just survive, perhaps gobbled up by wealth firms that see opportunities in DC plans. And wealth advisors who avoid DC plans will be less profitable, valuable and attractive to buyers struggling to keep up with advisors who are converting DC participants at record rates.
