Expanding Your Services: The Competitive Edge of Held-Away 401(k) Asset Management

An Interview with Jay Jumper, Founder & CEO at Future Capital, discussing the concept of held-away asset management, its importance for financial advisors, and how Future Capital approaches the challenges.

Watch the full interview here.

Key Takeaways

  • Held away assets like 401(k)s have been the largest asset owned by many people, but advisors have historically been prohibited from managing them.
  • The convergence of wealth and retirement allows advisors to tap into retirement assets, while retirement providers are fighting for wealth assets.
  • Future Capital supports advisors with held-away asset management by acting as the fiduciary for our account management service, building portfolios within existing 401(k) accounts, rebalancing accounts, and sharing revenue with advisors.

Held Away Asset Management

Can you explain the concept of held-away asset management and its importance for financial advisors today?  

Jay: Held away assets refer to things like 401(k)s that are held at other institutions where the advisor doesn't have direct access. This has prevented advisors from helping clients with these assets over the past 45 years. It's a major opportunity now for advisors to incorporate held-away assets into their practices to provide more comprehensive advice.

What are the key strategic benefits of incorporating a held away asset management system into an advisor service offering?  

Jay: There is a convergence happening between wealth management and retirement planning. Advisors want access to retirement assets while retirement providers want to get into wealth management. Helping clients with held away 401(k)s allows advisors to  bring additional services to clients before providers try to get the business.. It's a defensive play that also represents a growth opportunity.


What are the challenges advisors face in managing held away 401(k) assets?  

Jay: The main challenges are technical and regulatory. The assets sit in other systems where the advisor doesn't have direct access. There are also fiduciary responsibilities and regulatory considerations when taking on management of 401(k) assets. Advisors need the right technology to be able to take this on efficiently.

Are there compliance or regulatory considerations advisors need to be aware of?  

Jay: Yes, in taking on 401(k) management advisors become fiduciaries under ERISA which brings additional regulatory responsibilities different from SEC or FINRA obligations. It's a whole new regulatory framework to understand.

Future Outlook

How do you see the future outlook for held-away asset management in the industry?  

Jay: There is around $11 trillion in defined contribution plans compared to $55 trillion in wealth management assets. By incorporating held-away asset management, advisors can tap into 20% more assets from their existing clients' 401(k)s. This represents a big organic growth opportunity as firms look to grow. †

Can you expand on the convergence of wealth and retirement and what that means?  

Jay: The retirement providers are aggressively going after wealth management assets by building relationships through 401(k) plans. They are well-funded and organized and can capture wealth management assets before advisors have a chance to compete. Advisors can instead get on the offensive and start servicing held-away assets now.

Getting Started

For advisors interested in expanding into held-away assets, what are the first steps to take in getting started?  

Jay: First reach out to existing clients - around 75% likely have 401(k)s. Let them know these services are now available. Highlight the benefits of being able to manage their full balance sheet.  ††

How can advisors personalize their approach to held-away asset management?  

Jay: Future Capital provides customized individual portfolios for each client’s 401(k). This brings mass customization to the 401(k) space, which has traditionally been a challenge. Our technology enables personalization at scale.

Future Capital Capabilities

What unique features and capabilities does Future Capital offer advisors?

Jay: Future Capital takes on the fiduciary responsibility of managing  401(k) assets instead of putting that responsibility on advisors. We also provide scalable technology to efficiently manage a book of held-away assets.

† $11 trillion in defined contribution plans: Vangaurd 2022;

† $55 trillion in wealth management assets: Cerulli 2021;  

† 20% more assets from existing clients' 401(k)s: CWP Wealth 2020;  

†† 75% of wealth clients have a 401(k): McKinsey 2013;