Advisers serving small retirement plans are optimistic that the SECURE 2.0 Act will boost their revenue, according to a survey from research and consulting provider FUSE Research Network released Feb. 12.
Nearly 3 in 5 of the 80 advisers surveyed (59%) said they expect the legislation to increase their revenue by 1% to 10% by the end of 2025. Almost 1 in 10 (9%) anticipated increases of 10% or more. One-third did not expect any impact at all.
The legislation requires businesses with 10 or more employees to enact automatic enrollment and automatic escalation in 401(k) and 403(b) plans started after Dec. 28, 2022. It also expands tax credits to help small employers offset the cost of launching workplace retirement plans.
“This is a very positive response from DC plan advisers because the SECURE 2.0 opportunity is helping establish small, new retirement plans — where the profit margins tend to be slim for relatively more work,” said Loren Fox, director of research at FUSE Research Network, in a news release.
Retirement plan advisers reported working with employers on implementing auto enrollment into plans of all sizes, with 79% working with small plans with $1 million to $10 million in assets, 56% working with micro plans with less than $1 million and 51% working with middle-market plans with $10 million to $100 million.
Many advisers (60%) also reported that even employers not required to implement auto enrollment — or those with fewer than 10 employees — were putting the feature in place.
"It’s a good sign to see so much hope from retirement plan advisers who make a living setting up and counseling DC plans," Fox said. "This suggests SECURE Act 2.0 could really kick-start a lot more 401(k) and 403(b) plans, and lift participation through auto enrollment and growing contributions to the plans."
FUSE Research conducted the survey in November.
