Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for WealthManagement.com’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
Worth reading/listening/noting:
Read the full raw transcript below:
Greetings & a warm welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at WealthManagement.com’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV – I review all of this week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real!
FIRST STORY
The WSJ reported that 66% of CEOs at a Yale School of Management gathering are either planning to reduce or maintain staff counts in 2026 based on economic uncertainty and the potential effects of AI on productivity.
Not only has new job formation plummeted in 2025 and unemployment rates risen to 4.6% in November, firms are cutting payroll at the highest level in 22 years this past October.
Most of the new jobs were created by healthcare, education and government sectors with the white collar/business market faring badly causing many workers to just hold on to their jobs.
As a result, CEOs are focusing on training especially on the use of AI with benefits and retirement services to be used as a retention rather than recruiting tool.
Next story:
Beyond Trump’s Executive Order to make it easier for PE firms to access DC participants, that industry is being forced to look for new sources of funding as many struggle to raise capital with some of the largest targeting the $13 tr in DC plans with relatively unsophisticated investors.
PE returns have lagged since interest rates have risen with the average return of 5.8% from 2022 to 9/25 compared to the S&P’s 11.6%. Some of the biggest pension funds are firing PE firms focusing on the largest well performing ones resulting in what many predict will be massive consolidation.
Many PE firms are saddled with legacy companies in their portfolio as the IPO market has stalled and are reluctant to sell at discounted prices which would further deflate returns with many companies not currently marked to market.
Some record keepers and many RPA aggregators are funded or owned by PE firms. As consolidation hits both segments, will there be new PE firms willing to invest or buy with only those that can leverage the convergence of wealth and retirement likely to survive?
Next story:
Is the latest sweeping lawsuit by Schlichter Bogard targeting benefits and brokers the start of a new wave of ERISA litigation? Though not based on the new fiduciary standard in the CAA, it could cause employers to change how they choose and manage vendors.
The lawsuit focuses on carrier selection and broker commissions especially voluntary benefit premiums paid by directly employees as well as self dealing citing the lack of oversight, RFPs and due diligence required under ERISA.
Will a wave of benefit lawsuits cause employers to take their fiduciary duties more seriously just as it has for DC plans and are RPAs owned by benefit firms like Hub, OneDigital and Marsh McLennan best positioned to help and cross sell?
Next story:
Will AI help wealth advisors revolutionize lead gen and prospecting services? The folks at Finny believe so founded by engineers and machine learning experts just raised a $17m Series A round after getting $4.2m in seed capital last year.
Finny is attempting to structure unstructured data from multiple high net worth and donation databases to identify best fit prospects for advisors and then create an automated marketing campaign serving up leads.
While RIA consolidators and the M&A market are still robust, they are focused on back office services and cost savings. Few are able to help with organic growth which is why so many RIAs still rely on leads from Fidelity and Schwab or traditional lead gen firms like SmartAsset, Zoe and WiserAdvisor.
Could AI change the way that RPAs identify prospects within their DC plans? Perhaps Finny will be able to answer that question.
FINALLY
Maslow famously wrote that when the only tool you have is a hammer, you tend to see every problem as a nail. So when you ask a retirement or benefits professional about the best ways for people to prepare for retirement, the almost universal answer is to focus solely on wealth and health.
Read my recent WealthManagement.com/RPA column on how Manulife John Hancock is attempting to reframe the narrative embarking on a five year multimillion initiative with MIT’s Aging Lab creating what is called a Retirement Preparedness Index.
FINISH
So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:
Retirement Clearing House surpasses $20 bn
The perils in navigating a record keeper switch
Why AI cannot replace true fiduciary advice
Fred Reish joins Prime Capital
AI agents set to slash audit costs
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next month after my 30 day retreat on 401k Real Talk.