Why Convergence of Wealth and Retirement Is Heating Up Now

The wealth management and retirement plan sectors are increasingly merging as leading advisory firms, record keepers, and asset managers seek new avenues for growth and client acquisition. This convergence is driven by data showing that advisors who integrate retirement plans into their practice grow significantly faster than those focusing solely on one area. For the wealth management industry, this shift represents a strategic move to capture assets at the source and defend against rapid consolidation across the financial services landscape.

Industry leaders are aggressively positioning themselves to capitalize on the intersection of retirement plans and private wealth. Creative Planning CEO Peter Mallouk identified this convergence as his firm’s primary opportunity for the coming years, backed by major acquisitions including Lockton’s retirement division and Sageview, which brought in $100 billion and $285 billion in assets respectively. Other major players are following suit, with Hightower acquiring institutional consultant NEPC and its $1 trillion in assets, while firms like Mariner and Cerity have also completed strategic acquisitions to bolster their institutional and retirement capabilities.

The financial incentive for this integration is supported by growth metrics and market reach. Michael Doshier of LPL noted that advisors who manage retirement plans grow 2.1 times faster than purist wealth advisors, as these plans provide a steady pipeline of business owners and committee members. Edward Jones is also expanding its footprint in this space by investing in the tech-first TPA Aboon and partnering with record keepers like JPMorgan Chase and T. Rowe Price to reduce friction for advisors working with small business owners. Currently, 70% of Retirement Plan Advisors (RPAs) already offer wealth services, according to NMG Consulting, as they attempt to close the gap with early movers like Captrust.

Despite the momentum, the scale of the wealth management market remains the dominant force, with Cerulli data valuing wealth assets at $74 trillion—more than five times the size of the Defined Contribution (DC) market. Wealth management also offers significantly higher margins, with fees averaging eight times those of DC plans, resulting in a revenue opportunity 40 times greater. However, because most high-net-worth individuals already have established advisory relationships, firms are increasingly looking toward the workplace as a critical entry point to reach the next generation of affluent clients before they exit their professional careers.