Financial advisors are finding growing success in transforming workplace retirement plan participants into full-service wealth management clients.
A new study indicates that 62% of surveyed advisors convert at least 6% of the defined contribution plan participants they work with into ongoing wealth management relationships. The findings highlight how advisors are leveraging retirement plan access to deepen client ties and drive organic growth.
The strategy is not limited to firms that specialize heavily in retirement plans. Only 9% of advisors in the survey oversee more than 20 defined contribution plans, while 26% report not servicing any DC plans at all. Even so, many advisors are capitalizing on plan relationships when the opportunity arises, particularly when those plans are connected to existing business-owner clients.
The study from the FUSE Research Network’s Advisor Insight division also reveals that conversion rates tend to be stronger among larger firms. Forty-one percent of advisors with more than $500 million in assets under management report converting more than 15% of plan participants into wealth clients. That compares with 28% of advisors managing less than $100 million in assets.
Financial wellness initiatives appear to be playing a key role. Nearly 60% of advisors now offer holistic guidance or individualized consultations to participants within the retirement plans they support. These expanded services often open the door to broader planning conversations beyond the employer-sponsored plan.
“Advisors are increasingly willing to serve a handful of DC plans — often 401(k) plans tied to existing business-owner clients — because participants represent one of the most efficient sources of new wealth relationships,” said Loren Fox, Co-Manager of Advisor Insight at FUSE Research Network. “In fact, 65% of advisors tell us converting plan participants is easier than acquiring clients through traditional marketing or referrals.”
The report also points to a broader blending of retirement plan advisory work and traditional wealth management. As firms look to strengthen both capabilities, that convergence is influencing strategic decisions, including mergers and acquisitions activity across the advisory landscape.
Luke Lee launched the company in 2016. It eventually issued $1.2 billion high-risk investments.
The company aims to bring Quicken's budgeting and investment tool tracking to its 20,000-plus advisor network
Americans may feel better about retirement, but new research suggests confidence and preparedness aren’t always the same thing.
A $2.97 million commission haul and rolled-over retirement money sit at the center.
He sold "safe" notes on his radio show. The SEC says he was never licensed.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
