The 401(k) market is booming for qualified plan advisors, but advisors who specialize in group retirement plans are few and far between.
Working with 401(k) plans is time-consuming and “it is hard to find someone willing to learn the business. You have to get someone early on in their career,” said Jania Stout, practice leader and vice president of the Fiduciary Consulting Group at PSA Financial Services Inc., based in Hunt Valley, Md.
Because of that, Stout says she is always looking for skilled advisors to hire. If five skilled 401(k) advisors applied for a job with PSA today, she said she would hire them on the spot.
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“It is a big market. There is a huge shift going on. It used to be that brokers or advisors would have a couple of plans in their whole entire career. Now most of the plans are moving to 401(k) specialists,” she said. “Because of that, our team is growing. A lot of plan sponsors are looking for someone really qualified at this; someone who knows compliance and provider landscapes.”
The fact that plan sponsors are actively searching out skilled 401(k) advisors is a recent trend, she said.
In the past, plan sponsors could practically ignore their plans. The 401(k) was a relatively small employee benefit that was overshadowed by time spent working with health care benefits. Now, because of litigation and regulatory scrutiny of plan fiduciaries, chief financial officers are realizing they can’t just turn to their golf buddy as a plan advisor.
There is a big gap between the advisors who are real experts in qualified plans and newer advisors who are on the learning curve while trying to amass clients, said Jason Grantz, an institutional consultant with Lexington, Ky.-based Unified Trust Retirement Plan Consulting Group.
To address that, some advisors are beginning to partner with those who have the expertise. “They are splitting accounts instead of competing against each other,” Grantz said.