Wealth management professionals who haven’t done a lot of work in the retirement plan arena often don’t know where to start when it comes to establishing a 401(k) plan business, especially one that caters to big employers — but the truth is that the same basic principles apply when trying to wow retirement plan clients both big and small.
In fact, as discussed by a panel of experts recently convened during the 2025 National Association of Plan Advisors conference in Las Vegas, winning and serving retirement plan clients is not all that different from winning and serving retail wealth management clients.
Yes, there are some regulatory nuances to contend with, but these can be navigated through a commitment to transparency and fiduciary prudence — the same elements that are essential in serving individual clients and their families. Retirement plans, after all, are ultimately set up to benefit individual retirement savers through the power of greater economies of scale.
Speakers on the panel included Veronica Bray, founder of Retirement Plan Advisor Search; Andrea Donaldson, executive vice president of retirement plans for MSH Capital Advisors; Kristina Keck, vice president and practice leader for retirement plan services at Woodruff Sawyer; Antonio Kitt, director of business development at Hub International.
Given their firms’ various functions in the wide world of 401(k) plans, each speaker brought a different perspective to the discussion. They all agreed on one point, however: Advisors who are simply avoiding the 401(k) plan marketplace out of habit are likely missing out on significant potential growth.
To help wary advisors get a foot in the 401(k) plan door, they offered a high-level game plan for things like scheduling client meetings, setting up a fee structure and tracking performance.
How Often to Meet With Clients
As in the retail wealth management world, the panel agreed, the pace of client meetings depends a lot on the size of the client and the complexity of their retirement plan offering. Another factor is how long the plan has been in operation and how knowledgeable is the business owner or plan committee.
Generally, the panelists said, the best practice for any startup plan is to meet at least quarterly, as there’s a lot of boxes to check. It’s also probably smart for advisors who win even relatively established plans to meet this frequently, as this allows the client and advisor to get to know each other and establish a rapport and rhythm.
After the first year, the frequency of meetings can be reassessed. Some clients may continue to value quarterly meetings, while others may be comfortable dialing that back to semi-annual meetings. In either case, advisors should be regularly communicating with their clients via other means to ensure they are keeping abreast of any big changes or challenges that arise.
Governance Issues Are Paramount
As the panel noted, advisors who start 401(k) plans for clients must ensure the importance of the governance process is impressed upon them. Litigators see poorly run retirement plans as juicy targets for fiduciary lawsuits filed under the Employee Retirement Income Security Act, especially as they grow.
The good news is that ERISA attorneys and governance experts are available in abundance to complement advisors’ expertise. Depending on the circumstances, it can make sense to work with attorneys in any number of ways — on a project-by-project basis, on retainer or even to source in-house expertise once the business gains enough traction.
It’s not just for startup plans that the governance question takes precedence, the panel warned. Often, advisors find themselves winning midsize or even large retirement plans that are operating with significant governance issues, and fixing them can be a fast way for the advisor to deliver value and gain credibility.
Another important source of expertise is the plan’s recordkeeper. Often, plan providers will make their own experts and client service specialists available to attend client meetings, including ERISA experts.
Picking a Fee Structure
As in wealth management, when setting up a compensation structure for a 401(k) plan client, advisors have a number of choices to consider — and some regulatory complexity to deal with. Again, utilizing ERISA attorneys to review one’s compensation practices makes a lot of sense, especially early on.
According to the panel, it’s generally best to work with small plans by setting a base fee, since they don’t have sufficient assets for an assets-under-advisement model to work. The good news for clients is that they can take advantage of new and long-standing tax credits to offset some or all of this fee while the plan grows sufficient assets to switch to an AUA model.
Commonly, advisors will set a flat fee and then lay out a compensation grid that recognizes asset growth. This helps both the advisor and the client from a budgeting standpoint.
Once a plan grows sufficiently, or when an advisor is taking on an established plan client, the AUA model makes a lot of sense — though some advisors prefer to stick to a flat fee in order to avoid the impact of market volatility on revenue. Whatever the model one uses, the panel agreed, it’s important for the advisor to do a fee analysis on a regular basis — generally annually — as both an offensive and defensive strategy.
Sometimes, the advisor may find their fee is too low given the growing complexity of a client relationship. On the other hand, an asset-based fee can grow inappropriately high for the complexity of the relationship — leaving an advisor vulnerable to losing that business to another advisor who can undercut their rate.
A hybrid approach is also often utilized with startup plans that are expected to grow quickly, where the advisor puts in a small asset-based fee to start with plus a flat fee arrangement on top of it. That way, there doesn’t need to be a big compensation renegotiation just one or two years into the relationship.
One challenge to consider is that many of the leading firms in the retirement plan arena also have wealth management arms. This lets them set their 401(k) service fees lower than they otherwise would be able to do, given that they can expect to generate ancillary wealth management fees via the employer relationship.
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