LPL is bringing retirement savings services to small businesses

Small businesses are concerned they won’t be able to meet employees’ growing demand for more comprehensive benefits post-pandemic — but LPL Financial is trying to change that.

The independent broker-dealer announced that LPL advisers now have access to the newly launched Strategic Market Solution Plus, which will allow them to offer retirement plan administration solutions for small businesses.

LPL partnered with insurance company Lincoln Financial Group and human capital software platform Paylocity, which will oversee the service’s website and payroll integration respectively.

“There's a huge retirement savings crisis in the United States,” says Andy Harper, senior vice president of Retirement Partners at LPL. “Approximately [half] of the workforce in the United States is not even offered a company sponsored retirement plan — this gives them a vehicle where they can have savings come from their paycheck automatically on a weekly or bi-weekly basis.”

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Small business owners don’t often have the spare time (or expertise) required to implement a retirement savings vehicle. The service helps offset investment fiduciary risk, reduce the costs and administrative tasks associated with managing retirement plans and easily offer options designed to fit their employees’ needs.

“The Department of Labor looks at a business owner as an expert when it comes to company-sponsored retirement plans,” Harper says. “And in actuality, the business owners themselves are just trying to run their business, not learning and figuring out how to run these plans.”

LPL’s offering comes at a critical turning point for small businesses. Ten states — California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington — have already signed legislation to begin mandating that companies with five or more employees offer some kind of employer-sponsored retirement savings plan, according to the Pew Charitable Trust.

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Over the next 10 years, it’s estimated that there will be $7 trillion in new savings, 60 million new savers and approximately 625,000 new employee-sponsored plans, according to data from the National Association of Plan Advisors. With small business owners already fighting to boost benefits and remain competitive in the post-pandemic job market, they’ll be looking for seamless solutions — before the government forces their hand.

“As a business owner do you want to be forced into something?” Harper says. “Or would you prefer to shop around and go to the private market to see what's available out there?”