With the government’s continued emphasis on fee disclosure and transparency, pricing for defined contribution/401(k) plans will continue to fall for all vendors, including advisers.
Though less commoditized than recordkeepers and asset managers, advisers have to be ready to demonstrate their value to more discerning buyers and focus on ways to run their practice more efficiently, since they will be forced to service more plans for less money per plan. While it is rarely recommended that advisers sell on cost instead focusing on value, advisers who don’t focus on ways to efficiently run their practices with an emphasis on the bottom line will struggle in the new, cost conscious, fee transparency, fiduciary focused DC market.
