Turning Participant Relationships Into Wealth Relationships

Retirement plan providers can enjoy the trust of American workers, who count on them to set a foundation for their long-term financial freedom. But what if that trust could go farther?

The typical retirement plan participant has financial needs that extend beyond planning for their golden years. From college savings to estate planning, participants need help putting their money to work toward multiple goals. Thanks to the credibility they’ve already established with plan participants, retirement plan providers are uniquely positioned to offer that help in the form of more holistic financial advice.

In fact, plan participants are already demonstrating their interest in such services. A quarter of 401(k) participants who work with a financial advisor found their advisors through their 401(k) plan providers or plan advisors, according to a participant survey by Cerulli Associates.¹

"The industry is already moving this way, demonstrating how recordkeepers can add wealth services as an extension of their value proposition. Let’s take a closer look at this opportunity."

Wealth Management Supports Client Retention

Cerulli estimates that roughly $941 billion in workplace retirement savings will roll into IRAs in 2026 alone.² Across financial services, client retention is a major priority in an increasingly competitive environment. For retirement plan providers, the challenge is particularly acute: The average job tenure for the American worker is under three years.³ When participants leave their jobs, they often leave their former employer’s retirement plan.

But retirement plan providers that offer holistic advice can reduce attrition by creating an alternative path for retirement assets, post separation. When plan participants have additional investment accounts with retirement plan providers and rely on the providers’ advisors for wealth planning, they’re incentivized to maintain their relationships with the providers.

Some of the country’s largest plan providers are already seeing success offering wealth management services to retirement plan participants: Empower established a personal wealth division in 2023 and today the division holds $100 billion in assets under management—all from retirement plan participants.⁴

Meanwhile, Fidelity, long a leader in both retirement planning and brokerage, reportedly has been using a “pull-through” strategy to reach plan participants for years and currently employs workplace financial plan consultants to help workers review their overall saving and investing strategies.^5,6

Expanding Existing Client Relationships Through Wealth Management

Acquiring new clients can be an expensive and resource-intensive route to net new asset growth, while expanding wallet share with existing clients often proves considerably more efficient. Wealth management can be an effective lever for retirement plan providers to increase wallet share from plan participants.

Standard touchpoints in retirement planning provide organic opportunities to encourage plan participants to take advantage of wealth management services. For instance, when a participant first enrolls, outreach by the plan provider could include information on building a financial foundation to secure their futures. Later, following a raise or promotion, a plan participant may increase their retirement contribution; that moment can be an auspicious time to suggest exploring other ways they can channel their rising income.

And if a participant does switch jobs, the plan provider’s advisor can guide them through their available options. Of advisor-intermediated rollover assets, 86% take place through an existing advisor relationship, according to Cerulli.⁷

LPL Puts Retirement Platforms on Track for Wealth Management Success

With LPL Financial, retirement plan providers don’t need to spend years building out wealth offerings or committing capital to buying existing wealth businesses. Instead, LPL helps launch wealth capabilities without building or acquiring a wealth business, delivering ready-to-launch wealth management offerings that extend financial advice beyond 401(k) and 403(b) plans to serve clients’ diverse financial needs.

As the industry's well-regarded wealth management platform, financial institutions rely on LPL for expertise and innovation. LPL provides access to specialists in trust, compliance, and investment strategies so retirement platforms can serve clients while reducing risk and overhead.

LPL’s scale and significant investment in specialized technology can boost both advisor efficiency and customer experiences. And LPL's platform and capabilities are broad enough to cover every plan participant, ranging from advisors who work with high-net-worth clients to those who serve clients at scale.

For more information on how LPL can help your organization with client loyalty and business growth through wealth management, get in touch.