Open, honest and candid discussions and dialogue on the most critical issues facing the RPA space.
401(k) Real Talk Episode 205: August 12, 2026
Open, honest and candid discussion about July jobs, Schlichter settlement, DOL amicus briefs, the struggle to find new advisors, financial planning as a benefit and more.
Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for Wealth Management’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
Worth Reading:
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’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 U.S. economy unexpectedly lost 23,000 jobs in July, while the national unemployment rate ticked down to 4.1% as people left the labor force, according to the Bureau of Labor Statistics.
Combined revisions for May and June wiped out 103,000 previously reported jobs. Average hourly earnings grew by just 2 cents, bringing the 12-month wage increase down to 3.2%—the lowest pace since May 2021 and not keeping up with soaring inflation and gas prices
Governments shed 53,000 jobs, led by local government and education cutbacks, Leisure and Hospitality lost 40,000 jobs, retail lost 19,400 jobs, and financial activities dropped by 14,000. Healthcare added 22,000 jobs (a slower pace than its 12-month average), and construction added 22,000.
Though all indices are up by double digits, employers are concerned and either not hiring because of higher costs and unstable economic conditions or because of productivity gains through AI. Soaring healthcare costs are forcing some to cut back on retirement benefits with few aggressively hiring.
Next story:
Schlichter bagged another group plan winning a $48 m settlement against ADPs Total Source, a $4.4 bn MEP covering 50,000 participants used by many PEOs. Last year he won a $39m jury trial against Pentegra’s MEP and later settled another case with them for $48.5 m. The ADP lawsuit filed in 2020 had alleged high administrative costs, poor investments and improper self dealing
Along with monetary damages, ADP agreed to hire a new consultant, review their TDFs, use rev sharing to offset costs, conduct committee fiduciary training and have their independent consultants run an RFP.
While some larger employers are hoping to use group plans like PEPs to shield them from lawsuits, experts like Nevin Adams think that the group plan structure may actually create opportunities for lawsuits.
NEXT STORY
Raising the question of whether the DOL should be protecting plan sponsors or participants when their interests do not align, Kerry Pechter points to the recent spat of DOL amicus curia briefs along with explicit statements as a clear indicator that they are now clearly siding with the employer almost exclusively.
Many politicians and certainly the current EBSA director who had led a fiduciary insurance firm before his appointment have cited ERISA lawsuits as harmful which can discourage corporations from offering a plan or at least inhibiting innovation.
But if lawsuits are curbed through the DOL’s efforts or legislation and the DOL and the Trump administration clearly favor employers and big corporations over participants, who will be protecting them? Though some lawsuits are spurious, some attack and inhibit egregious behavior by plan sponsors, providers and advisors. What ever happened to exclusive benefit?
NEXT STORY
There is a healthy debate about whether there actually will be a shortage of financial advisors but no argument about how the industry struggles to hire and train the nextgen as well as create succession plans.
Based on surveys with over 8,000 advisors, Cerulli predicts that one third of advisors will be retiring over the next decade while struggling to attract, hire and train younger advisors citing the extreme time commitments and expectations for quick advancement by new hires.
Cerulli notes that the old model of cold calling to build a business will no longer work nor will selling life insurance to friends and family. With 27% of firms unsure of their succession plan and many others not prepared, something has got to change.
FINALLY
Should financial planning become a standard employee benefit? Brad Arends, CEO and co-founder of Intellicents, has long been a believer. He’s mostly advocating for personal reasons believing it’s the right thing to do. But good intentions do not move markets although they can start a movement
Read my WealthManagement.com/RPA column about how it may be the right time for advisors to be leaning into financial planning for all and how that could work.
FINISH
So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:
Prime Capital recapitalizes, selling stake to Carlyle
Vanguard report shows the value of stretching the match
Bloomberg columnist pushes back on Ted Benna’s doubts about 401(k)s
Emergency savings may result in high contribution rates
Advisors now need to master retiretech
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk