The Road to NAPA: The Convergence of Wealth and Retirement
The Road to NAPA: The Convergence of Wealth and Retirement
The workplace retirement industry’s nearly $13 trillion assets are primarily managed by just 12,000 retirement plan advisor specialists. Yet over the next few years, 400,000 new 401(k) plans are projected to hit the market as a result of SECURE 2.0 and state mandates.
This surge presents a unique opportunity for the nearly 275,000 wealth advisors to expand their businesses and tap into a growing market. As NAPA’s 401(k) Summit approaches, a major theme of this year’s event will be how generalist advisors can easily leverage the retirement planning space to seize these new growth-driving opportunities and scale their practice.
The State of the Industry
The retirement savings industry has long been influenced by legislation and policy. Recent developments continue this trend, particularly with Congress’s SECURE 2.0 and the growing number of state retirement plan mandates. As a result, employers are relying on financial advisors more than ever to navigate these evolving changes.
The state of the industry creates two major outcomes for advisors to keep in mind as they navigate this historic year:
1. New regulations are causing an influx in demand for retirement plans.
Legislative shifts are fueling a significant increase in demand for retirement plans this year. Whether it’s utilizing SECURE 2.0’s tax credits or implementing a qualified retirement plan to comply with state mandates, more employers are preparing to offer 401(k) plans.
2. Businesses are seeking advisors who can offer holistic financial benefits beyond just retirement plans.
With economic hardships a main concern for employees, many businesses are prioritizing advisor relationships that extend beyond retirement plan asset management. From 529 Education Savings plans to student loan assistance and Emergency Savings Accounts (ESAs), many businesses are expanding their benefits package. In addition, many employers (and their employees!) are seeking general wealth management solutions.
Advisors who can provide these holistic financial wellness solutions are not only helping employees build long-term savings but also expanding their book of business with a wider range of offerings. This shift highlights a broader trend: an intersection between wealth and retirement planning that will require solutions that address financial wellness, holistically.
Opportunities for Generalist and Wealth Advisors
The bottom line is that advisor services will be in high demand in 2025. Whether you are a generalist or specialist advisor, the opportunity to grow your book of business in the retirement planning space has never been more apparent. Advisors can scale their firms by supporting businesses in setting up and managing these new retirement plans.
Moreover, as you engage with businesses to manage their retirement plans, the employees within these organizations can also become a valuable source for prospecting new clients. In fact, research from the Retirement Leadership Forum reveals that advisory firms uncover one potential wealth management client for every 10 one-on-one meetings with participating employees. This creates a prime opportunity for advisors to convert 401(k) savers into wealth management clients, further growing their business.
For a typical $5 million retirement plan, there is an estimated additional $7 million in outside wealth that advisors can tap into. The opportunity grows significantly with larger plans—a $50 million plan presents nearly $81 million in wealth potential, while a $150 million plan could offer over $240 million. And, as you expand your portfolio of retirement plans, you create more opportunities to connect with potential new clients.
Getting Started in the Retirement Plan Market
For generalist advisors who are ready to scale their practice and tackle this demand, here are some actionable tips for getting started with offering 401(k)s:
- Network With Your Existing Clients: Your business-owner clients may not be aware that you possess the skills to manage a workplace retirement plan. Checking with these clients—such as lawyers or doctors—is a great first step to getting started.
- Stay Up-to-Date With Industry Changes: SECURE 2.0, state auto-IRAs, and ongoing legislation have reshaped the retirement planning landscape. Staying informed about these changes will allow you to help your clients stay compliant while offering them retirement solutions.
- Find the Right Plan Provider Partner: Selecting the right retirement plan provider is critical. A strong provider will streamline plan setup and administration so that you and your clients experience the benefits of offering a 401(k). Look for a provider that offers flexibility, robust technology, and comprehensive support.
What to Look for in a Recordkeeper
Whether you’re a seasoned professional managing hundreds of plans, or an advisor new to 401(k)s, it’s important to find the right recordkeeping partner. Here are key factors to consider when selecting a provider to expand your retirement plan services:
Does the provider handle the day-to-day work? Look for a provider who can manage the day-to-day administrative tasks, taking some of the heavy lifting off your plate.
Can your clients get the customer support they need? Choose a provider that offers responsive, high-quality support for both you and your clients.
Are the right payroll integrations available for your clients? Payroll integrations automate contributions and minimize errors in plan administration. Select a provider that supports a wide range of payroll providers.
Is the pricing straightforward and transparent? Opt for a provider with clear, transparent pricing that avoids hidden fees, so your clients know exactly what they’re paying for.
Are there flexible investment options? Confirm the provider offers customizable investment options so you can tailor plans to meet your client’s specific needs and preferences.
How Vestwell Can Help
Vestwell offers a modern, advisor-friendly platform designed to help generalist and wealth advisors manage retirement plans efficiently. This allows financial professionals to focus on scaling their practice while meeting the growing demand for retirement solutions.
Connect With Vestwell at the NAPA 401(k) Summit
Connect with us at the NAPA 401(k) Summit to learn how you can expand your offering with flexible retirement and financial wellness solutions. If you're attending the event in Vegas this April, be sure to stop by booth #311 to chat with the Vestwell team.
