Is your 401(k) advisor doing enough for your employees?

The retirement plan sitting inside your benefits package is more complex than it was five years ago, and it’s about to get more complex still.

For HR directors and people leaders managing employer-sponsored plans, that means the bar for what you should expect from your plan advisor has risen significantly. The question worth asking is whether yours is keeping up.

That is the framing offered by Aaron Tallen, VP and Head of Distribution Operations and 401 Defined Contributions at Security Benefit in Topeka, Kansas, who has spent 25 years working with plan sponsors and the advisors who serve them. He believes plan sponsors are re-engaging with the retirement industry in ways not seen in years, and the employers who will benefit most are those who demand more from their advisory relationships.

The complexity your employees are already feeling

The retirement plan landscape has shifted materially for small and mid-sized employers. According to HR platform Gusto, small business retirement plan adoption has grown approximately 60 percent since 2019, with almost one third of small businesses now offering a plan - a surge driven largely by state-mandated retirement programs operating across the country. That growth has brought obligation for HR leaders at those employers: employees who now have a plan expect it to work well and increasingly expect their employer to help them understand it.

Tallen described a "reawakening" among plan sponsors or a re-engagement with retirement benefits after a period of relative inertia, which has been driven by the sheer volume of change in the market.

"There's been enough change that the plan sponsors are really talking about it and they're really looking to find good experts to help them," he said.

The complexity driving that re-engagement is real. The Fidelity Plan Sponsor Attitude Survey, which Tallen cited as a key industry benchmark, shows the number-one priority for plan sponsors today is adding target date funds with an annuity or income rider — a decision that involves portability analysis, investment fiduciary considerations under the Employee Retirement Income Security Act (ERISA), and product comparisons most HR teams are not resourced to evaluate independently. Add to that a growing industry conversation around alternative investments and digital currencies inside retirement plans, and the decisions landing on HR leaders' desks have become uniquely sophisticated.

"All of those unique investments require a level of sophistication most 401 participants don't necessarily have," Tallen said. "If plan sponsors are weighing adding those to the plan, they need experts to guide them through that process and weigh the pros and cons."

For HR directors, that is not an investment management question, it’s a vendor management question. Is your advisor equipped to guide you through it? HR leaders exploring how plan design complexity is reshaping employer retirement obligations will find the answer increasingly determines outcomes for employees.

What a strong advisor relationship actually looks like

Tallen framed the value a plan advisor should be delivering around three things HR leaders will recognize immediately: simplifying complexity, providing structure and process, and sharing the administrative load. The last of these is where the Fidelity data is most relevant — the survey shows significant and growing employer willingness to pay for outsourced administration, including offloading fiduciary obligations to specialist third parties.

"Business owners and plan sponsors are putting a premium on their time," Tallen said. "No matter how much income you bring in, you can't replicate the time. What is becoming important to these plan sponsors is the great trend in offloading the administrative burdens of the plan."

For HR directors who have found themselves absorbing retirement plan administration tasks that sit uncomfortably alongside their core people responsibilities, this is a validation. The market has caught up with what many HR teams have long felt — that managing a retirement plan well requires specialist support, and that the advisor relationship should be structured to deliver it. The Fidelity data specifically points to growth in 316 fiduciary services, where plan administration, including processing loans, withdrawals, and transactions, is fully outsourced to a third-party administrator. HR leaders examining how outsourced plan administration is reducing the fiduciary burden on employer teams will find this model increasingly common among employers of all sizes.

Your employees want more than a plan

Perhaps the most significant shift Tallen described is not in plan design but in what employees are now asking of the plans their employers provide. Participants are increasingly looking to their retirement plan advisor — and by extension, to their employer — for guidance that goes well beyond investment selection.

"We're getting questions about providing education content for things that aren't necessarily 401 or retirement plan related," Tallen said. "Things like college savings strategies are top of mind. Inflation impact. The unique investments being talked about with alts and privates." For HR leaders who field employee financial wellbeing questions daily, this will not come as a surprise. What Tallen's account confirms is that the retirement plan is becoming the natural anchor point for broader financial wellness conversations — and employers who structure their advisor relationships to support that are better positioned to deliver on employee expectations.

The participant education demand is also showing up in how advisors are expected to engage with employees directly.

"You see a real need and expectation almost now of advisors to be on the front lines with the participants," Tallen said. "Retirement outcomes is the number one objective for these plan sponsors, as it should be."

For those evaluating advisor performance, participant engagement and retirement readiness metrics are increasingly the right measures — not just plan compliance and cost.

Security Benefit is addressing this directly with an AI-powered financial wellness solution planned for Q1 2027, designed to let participants ask plain-language questions about budgeting, mortgage planning, and retirement savings without needing to phrase them in financial industry terms. When evaluating benefits technology, how AI-powered financial wellness tools are changing employee retirement engagement is a space worth watching closely ahead of the next plan year.

One risk HR leaders should plan around

Tallen flagged one operational risk that HR directors are well placed to manage. The Fidelity data shows that advisor personnel changes and firm mergers are precisely the moment plan sponsors are most likely to put their retirement plan out to bid. If your firm is going through a merger, an acquisition, or a leadership transition — or if your plan advisor's firm is — that instability creates a window of vulnerability for the plan relationship.

"As these advisors expand their practices, they need to focus on how change can really disrupt the plan sponsor," Tallen said.

The practical implication is straightforward: build advisor transition protocols into your plan governance documentation, and treat advisor change as a material event that warrants proactive employee communication.

The broader message is one HR directors should carry into their next advisor review. Retirement outcomes — not plan administration — are the standard against which employer plans are increasingly being judged.

"How do advisors get their participants on track for a dignified retirement?" Tallen asked.

For HR leaders, that is the question worth putting to your advisor. If the answer is not specific, measurable, and participant-centered, it may be time to raise the bar.