At a glance
- The Oct. 14 report says the market is growing faster than at any point in the past decade.
- State policy is the main catalyst, according to the report.
- Small business owners are actively looking to reduce the number of advisors they work with, combining retirement, wealth, tax and benefits guidance under fewer relationships, according to the report.
Small-business retirement plan adoption has risen about 60% since 2019, and almost a third of small businesses now offer a plan, according to Gusto data cited by InvestmentNews. The Oct. 14 report says the market is growing faster than at any point in the past decade.
State policy is the main catalyst, according to the report. State-mandated retirement programs are sending owners of very small businesses to advisors for SEP, SIMPLE, solo K and small 401(k) plans rather than to government-run alternatives. Aaron Tallen, Security Benefit's vice president and head of distribution operations and 401 defined contributions, said: "State-mandated retirement plans are really driving, at least in the micro plan segment, a huge growth in small business retirement. The change in policy is attracting a lot of very small business owners to advisors to help set up their own retirement plan versus doing a government-mandated plan."
Small business owners are actively looking to reduce the number of advisors they work with, combining retirement, wealth, tax and benefits guidance under fewer relationships, according to the report. "You can absolutely see that just bringing it all in-house and kind of consolidating it really gets rid of the clutter," Tallen said.
Gusto's figures measure employer adoption, not advisor capture, so the 60% growth is a market signal rather than a revenue forecast. The micro plan segment Tallen names is the narrower play, where the mandate itself creates a deadline and a reason for an owner to call an advisor.
Reported by the Practice management desk from InvestmentNews. Published . Corrections