401(k) Real Talk Episode 173: November 5, 2025
Welcome to this week’s edition of 401(k) Real Talk, where Fred Barstein, contributing editor for WealthManagement.com’s RPA channel, reviews all of last week’s industry news and selects the five most important/interesting stories.
Worth reading/listening/noting:
Read the full raw transcript below:
Greetings & a warm welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at WealthManagement.com’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV – I review all of this week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real!
FIRST STORY
In a federal lawsuit, Human Interest claimed that senior executives at Guideline used moles to get sensitive and confidential information. What makes this really interesting is that Gusto is in the process of buying Guideline looking to sell the 27,000 or so plans that are not Gusto payroll clients which HI is interested in acquiring.
Specifically, the lawsuit alleges that 2 brothers working at HI funneled information about partnership deals, customer data and strategies to a brother working at Guideline allegedly with the blessing of their CEO and CFO.
Will the lawsuit affect the Gusto transaction as well as the deal to sell off the remaining plans with other payroll providers?
Next story:
Human Interest keeps raising money but this time at a significantly higher valuation. Overall HI has raised $700m at a $1.3bn valuation as of last summer but the current $100m raise is at $3 bn. Guideline had raised $340m with a $1.2bn valuation in 2021 selling to Gusto for a reported $700m plus whatever they get for selling off plans of non-Gusto payroll clients.
With almost 700 employees and annual recurring revenue reported to be $200m by the end of 2025, HI may be approaching breakeven as their CEO is reporting a goal of going public but likely not in the next 24 month.
The record keeper fintech buildup is a direct result of the explosion of new plan formation caused mainly by state mandates but also because most major RKs, other than payroll providers, struggle to service and make money with smaller plans hindered in part by legacy technology.
Next story:
While the DC world is buzzing about private investments, a direct result of the recent executive order, not all of these investments are created equally. Morningstar’s Pitchbook takes a deeper dive into the different types of private investments and which make the most sense in DC plans.
PE firms have been the most vocal with public facing comments intended to educate and normalize these investments but Pitchbook says that income producing investments like real estate, private credit and infrastructure might make more sense because they would be better able to handle redemptions. Pitchbook does not see VC or early stage investing applicable for DC plans.
While access to private markets may help boost non-correlated returns, it could certainly help active managers whose fees have declined over the years accelerated in part by CITs as well as non-fiduciary record keepers looking for additional revenue through placement fees.
Next story:
Interesting anonymous post by Encore Fiduciary, the new EBSA director’s former firm which insures ERISA plans against lawsuits, commending the DOL for pushing back on lawsuits through advisory opinions. Specifically, the DOL has weighed in on a forfeiture lawsuit and a case against Morgan Stanley about whether ERISA applies to their long term incentive comp plans. On the other hand, the DOL has recently asked for more time in the fiduciary rule lawsuit.
Encore claims that lawsuits should not be used to regulate plans under ERISA with criticism about data sharing by the DOL with plaintiffs’ attorneys though Lisa Gomez, former EBSA director in a Retireholics episode, explained that this practice is acceptable when there is a common interest.
And while industry pundits have been critical of lawsuits claiming it limits innovation, others say that the lawsuits have resulted in dramatically lower fees making larger plans more mindful while providing valuable lessons to smaller plans and their co-fiduciaries which may not have been necessary if the DOL had been more active.
FINALLY
People are inundated with information whether through text, email or video skimming over what might be important or even essential These issues are especially relevant for defined contribution plan sponsors who juggle up to 10 jobs and have little to no training and even worse for their employees struggling to save for retirement. So how can advisors communicate more effectively and tailor their messaging?
Read my recent WealthManagement.com/RPA column about how advisors can communicate more effectively which starts with not using acronyms and code sections but also being more mindful explained in a recent Podcast by UCLA professor Hal Hershfeld with Harvard Professor Todd Rogers who wrote: “Writing for Busy Readers: Communicate more Effectively for the Real World”
FINISH
So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:
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How private investments could depress 401k returns
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Government shut has slowed efforts to make private investments available in DC plans
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Disconnect between retirement savers and their advisors
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Equitable buys a piece of Stiffel
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LPL has retained 80% of Commonwealth assets and on track to keep 90% of advisors
Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.