In Early September 2025, TRAU convened the RPA Broker/Dealer Roundtable and Thinktank at the Broadridge offices in New York City. Attending was a group of senior executives of the defined contribution divisions of the most influential broker/dealers. Also attending were representatives from sponsors of the event. The primary purpose of the meeting: to discuss the most salient issues, both opportunities and challenges, on b/ds’ minds
Prior to the event, the DCIIA Retirement Research Center interviewed 23 of the attending b/d representatives to pose the question: What keeps you up at night regarding the opportunities and challenges you face in the DC space? Importantly, the interviews were confidential, and responses were grouped and generalized with no attribution to specific respondents.
The Perfect Storm Driving the Convergence of Wealth Services and DC Retirement Plans
Broker/dealers described the model that is driving one of the key issues on their minds: convergence. Specifically, b/ds explained (and record keepers agree) that record keepers’ economic model is under duress due to:
Fear of litigation over innovation
Consequently, record keepers need to find new revenue streams to survive. On the b/ds’ side of convergence, issues occupying a significant share of their minds were:
Wealth advisors are looking to expand their client base
Wealth advisors need to replenish their aging client base
Broker/dealers see the workplace as a rich source of new wealth clients as discontinuation of service (i.e., termination or retirement) creates the possibility of rollovers
Coop-etition: Will Convergence Also Be a Collision?
These market conditions are the driving forces of convergence. But because record keepers and b/ds have identified the same targets as a source of growth (and even existence), these forces have created a potential collision. Broker/dealers explained that while convergence is a potentially rich opportunity, it also has created an “Us versus Them” mentality with some record keepers. That is, some record keepers with advanced wealth advisory services are not willing to share data on terminating or retiring participants. Broker/dealers wonder if these record keepers will be restricted from their platforms in favor of those who are happy to share the data. Possible strategies to avoid the collision are sharing revenue on new wealth clients generated from DC plans, and/or tiering participant data, specifically, sharing data on participants above certain asset levels.
An Expected Tsunami of New Start-Ups and State-Mandated Plans Converting to DC Plans
Complicating the issue of convergence is the expected boom of start-up plans due to legislative changes or existing state-mandated plans converting to DC accounts. The tsunami is estimated to be as large as 200,000 new plans in five years. The challenge in meeting this surge in new plan formation is finding the advisors to set up and service the plans. There was general agreement that RPAs are only interested in older plans with assets. Consequently, many b/ds are looking for wealth advisors to meet the surge in demand.
Engaging and Educating Wealth Advisors in DC Plans
Broker/dealers agreed that most wealth advisors do not recognize the potential for new wealth clients in workplace plans. Educating (and convincing) wealth advisors of the potential will not be an easy lift. Furthermore, two other barriers to engaging wealth advisors in the DC plan market were detailed by the b/ds:
Wealth advisors don’t feel comfortable asking for their wealth clients’ DC business, and
Wealth advisors don’t know the details of how to service DC plans
Disruptive Innovation
Finally, b/ds concluded that the expected tsunami of new plans will require disruptive innovation instead of incremental innovation in legacy recordkeeping platforms. Broker/dealers conceded that wealth advisors will need support to effectively and profitably service small accounts. But many b/ds have been slow to embrace new technology offered by fintech companies. With such a large increase in demand, new solutions will have to be adopted. Those solutions will be explored in future TRAU Roundtables and Think Tanks.
