Recordkeepers are Expanding Their Reach to Non-plan Assets

Recently, two large recordkeepers, Empower and TIAA, announced plans to expand their wealth management services. These services are often offered through retail channels to the individual investor, rather than through a retirement plan sponsor. These services also typically include an additional fee that the participant will pay outside of the retirement plan. It is likely that these services will be offered without the involvement or input from plan sponsors.

It is not unreasonable or unexpected to see large financial services firms with increased interest in providing a full-service financial offer, especially to high-net-worth individuals. While these services are offered outside of a retirement plan, plan sponsors should understand how their recordkeeper markets these products and services.

Several recent lawsuit settlements have stated that recordkeepers may not use plan data to sell non-plan products and services to plan participants. As a result, plan sponsors should periodically review the marketing practices of their recordkeeper and understand the ways the recordkeeper is using the valuable participant information with which they are entrusted.

Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.

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