Skip to main content

You are here


The Benefits of Unbundled 401(k)s

In building strategic partnerships, Pete Kirtland wrote in Friday’s Wall Street Journal about the value and benefits of the unbundled approach: “When we talk about building 401(k) partnerships, there are two models in the retirement plan space. The old-fashioned one is called bundled. That's where all the different services for 401(k) plans — financial advisory services, record keeping, third-party administration and custodial services — are offered by the same entity. In an unbundled environment, a different entity provides each of these services, and that’s their core competency.

"One huge advantage of using the unbundled approach is that if for some reason one of those providers underperforms, you don't have to throw the baby out with the bathwater. You can simply replace that one element instead of replacing the entire plan.”

Kirtland summarized, “Bundled, institutional 401(k)s cost more and have less flexibility, but they’re easier for advisers to use. Working with unbundled plans, on the other hand, involves a bit more work. But for advisers, the payoff for that extra effort is setting yourself apart by making participant outcomes the top priority.”

You’ll find the complete article here.