At a glance
- Advisers today can manage workplace accounts on a discretionary basis when clients authorize it; under the new option, the adviser proposes and the client executes.
- Discretionary management of a held-away 401(k) asks a client to cede control of an account that sits at a plan provider the adviser does not operate; nondiscretionary advice keeps ownership and execution with the saver while handing the adviser a supervised role in the account's ongoing investment decisions.
- Firms that use the offering also get Pontera's existing reporting, billing, supervision, and compliance integrations, and the billing piece matters because a held-away 401(k) can sit outside the billing relationship even while it appears in the asset allocation.
Starting in September, Pontera will let advisers make ongoing investment recommendations inside clients' workplace retirement accounts without holding discretion over them — the fintech, which connects advisers to employer-sponsored plans, has already opened a waitlist for nondiscretionary retirement advice.
Advisers today can manage workplace accounts on a discretionary basis when clients authorize it; under the new option, the adviser proposes and the client executes. Clients keep responsibility for making changes, and advisers cannot withdraw funds, change beneficiaries, or modify contribution rates through the platform, where recommendations land in a client queue and both sides receive notifications when a recommendation is made or an account change is pending.
Discretionary management of a held-away 401(k) asks a client to cede control of an account that sits at a plan provider the adviser does not operate; nondiscretionary advice keeps ownership and execution with the saver while handing the adviser a supervised role in the account's ongoing investment decisions. Portfolio drift monitoring, rebalancing recommendations, supervisory alerts, audit trails, and client reminders give that role a paper trail compliance can review.
Firms that use the offering also get Pontera's existing reporting, billing, supervision, and compliance integrations, and the billing piece matters because a held-away 401(k) can sit outside the billing relationship even while it appears in the asset allocation. The platform now lets advisers charge for the attention those assets receive without pretending they have moved to the adviser's custodian.
Read as an argument, the launch is Pontera's case for folding held-away 401(k)s into the advisory relationship without claiming custody; the nondiscretionary wrapper is likely what makes that acceptable to participants who want help rather than control, and it gives firms a revenue channel that does not carry the operational weight of full discretion.
The open waitlist suggests demand exists; the September launch will show how many firms want the ongoing relationship enough to absorb the alert load and how many advisers come to treat the 401(k) as a billable asset.
Reported by the Practice management desk from PLANADVISER. Published . Corrections