{"id":446532,"date":"2026-05-26T19:44:09","date_gmt":"2026-05-26T19:44:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/446532\/"},"modified":"2026-05-26T19:44:09","modified_gmt":"2026-05-26T19:44:09","slug":"whats-stalling-401k-record-keeper-consolidation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/446532\/","title":{"rendered":"What’s Stalling 401(k) Record Keeper Consolidation"},"content":{"rendered":"

There has been a lull in the consolidation of 401(k) record keepers, briefly interrupted by the pending Ascensus acquisition of American Trust,<\/a> which may be a false positive. There are still over 40 national and 200 regional record keepers, which is unsustainable, but buyers have dried up. The big pay days enjoyed by MassMutual and Prudential, which sold their record keeper divisions to Empower, may be over evidenced by the shockingly low price paid by Voya for OneAmerica\u2019s DC business. There may be many reasons for the devaluation, including the high cost of record-keeping and declining fees, forcing most to seek participants\u2019 wealth services.<\/p>\n

Why should advisors care?<\/p>\n

Plan sponsors rely on their retirement plan advisor to avoid providers likely to exit and messy conversions, just as advisors rely on wholesalers who are the giraffes of the 401(k) industry to determine if a record keeper might be about to exit<\/a>. So, along with fees, funds and fiduciary services, advisors are expected to anticipate which providers are likely to exit, adding another element to provider due diligence.<\/p>\n

Related:401(k) Real Talk Episode 193: May 20, 2026<\/a><\/p>\n

American Trust<\/a>, started by industry veteran John Moody, who co-founded Matrix, was started in part to roll up smaller, regional record keepers. Along with acquiring First Mercantile from MassMutual, they also acquired Mid Atlantic Trust in 2018. Subsequently, Edgeco, the parent company, acquired American Trust, Lincoln Trust and Unified Trust, all smaller, regional record keepers. It had been reported that American Trust got little interest when they went to market with just their record-keeping assets, but got a premium of a reported 10x EBITDA when they included the trust company. There\u2019s another third-tier record keeper reportedly on the market also getting little traction.<\/p>\n

American Trust is the first acquisition by Nick Good since stepping up as Ascenus\u2019 CEO, replacing David Musto. Ascensus had done a few smaller deals since acquiring Newport, which focuses on non-qualified plans, including Mutual of Omaha, with which they had been partnering, and Vanguard\u2019s Simple\/SEP business. Vanguard, which outsources small DC plan administration to Ascensus, created its own small market wholesaling force over a year ago and stopped using Ascensus to sell to advisors.<\/p>\n

There are several providers in the RPA sold 401(k) market with scale, several more with unique distribution or business models, plus the two payrolls and the budding fintech record keepers. While scale drove consolidation over the past two decades, those that have it do not need it, and the ones that do not are too far from achieving it. Complimentary businesses are becoming more important, as evidenced by Empower\u2019s $1 billion purchase of Personal Capital and its announcement that it is on the hunt to buy a national RIA, while<\/a> it seems less interested in acquiring another record keeper.<\/p>\n

Related:How Will the Industry Handle the Explosion of New 401(k) Plans?<\/a><\/p>\n

Ascensus is a tech and service company at heart, eschewing asset-based fees or creating investment products. Good says they are focused on operational efficiencies as well as simplifying and streamlining customer experiences, but the hiring of Josh Rundle from Transamerica to create new products, as well as the capabilities of American Trust to provide wealth services like IRA rollovers and support RIAs, may indicate a different direction for Ascensus. Though Good emphasized that they will be looking to partner with advisors, not compete, the economics may be tricky.<\/p>\n

American Trust\u2019s Mid Atlantic division services $165 billion, 136,000 clients and 90 independent TPAs and record keepers. It\u2019s likely that many of the 200+ regional record keepers, most without scale and distribution, succession planning and technology support, just as FIS is releasing their cloud-based version of Omni and Relius<\/a>, will be looking for partners or buyers. Perhaps Ascensus sees an opportunity to acquire or partner with these smaller firms.<\/p>\n

Related:401(k) Real Talk Episode 192: May 13, 2026<\/a><\/p>\n

Regardless, RPAs need to understand how their provider partners\u2019 businesses have changed, with few able to rely on plan fees alone. The result is that most will either have to develop wealth services, evidenced by the stark 2025 McKinsey report,<\/a> potentially putting them in competition with advisors, or exit the business if they can find a buyer, which is getting harder to do.<\/p>\n

Ascensus\u2019 bold move to buy a trust and custody business that serves RIAs at a premium, which may also allow them to enter the CIT market, is an example of how ancillary businesses that providers offer to employers and their employees are more important than the record-keeping services that have become table stakes, just like advisor Triple F services, at least when it comes to revenue and certainly profit.<\/p>\n

It\u2019s scary for RPAs with so many providers to choose from, most of which will either sell or not be competitive in the long run, unable to invest and keep up. So it\u2019s not a question any longer of who will exit\u2014RPAs need to decide which ones are very likely to survive and, of those that do, which will not be competing unfairly to service the wealth and financial planning needs of the participants.<\/p>\n","protected":false},"excerpt":{"rendered":"There has been a lull in the consolidation of 401(k) record keepers, briefly interrupted by the pending Ascensus…\n","protected":false},"author":2,"featured_media":446533,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":["post-446532","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-new-zealand","tag-newzealand","tag-nz","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/446532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=446532"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/446532\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/446533"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=446532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=446532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=446532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}