Financial Education Transforming RPA Industry
401(k) plans are an illusion. They are simply aggregated accounts of participants in a plan to make investing small amounts into investments for the average worker feasible, which changes by the hour.
Like time, defined contribution plans are useful illusions, but the industry is finally waking up to reality for many reasons, such as the need to offer higher margin wealth and consumer finance services. Some call it convergence.
Cold calling is dead. It’s amazing that so many appointment-setting services started in the 2000s are still used. It does not work as advisors need to provide value to plans and participants before they can ask for their business. What works are educational programs, where advisors deliver high-level fiduciary education with no hint of sales and marketing, after which they can ask for the time to present their services. The most successful lead generator for financial advisors is SmartAsset, which uses thought leadership to attract individual investors.
Triple F advisors are the walking dead. As plan fees continue to decline, those offering participant services to help, monetizing participants alone or in partnerships, will thrive.
Financial education has been a dismal failure. According to a 2014 academic study of 168 papers covering 201 prior studies on financial literacy programs, there was a 0.1% variance in behavior, even less for lower-income individuals.
But current conditions, greater access to data and better technology, especially artificial intelligence, are changing how providers and advisors use and view employee education above and beyond serving as a fiduciary checklist.
At the September 2025 RPA Broker/Dealer Roundtable, a wirehouse that gained access to and used participant data over the past five years did not allow advisors to use the data to sell anything—it is strictly for education purposes, which might turn into sales opportunities. AI is deployed to match participants with wealth advisors.
Other broker/dealers at the Roundtable noted that more record keepers are willing to provide participant data, but a very few are equipped to use it in a timely and safe manner.
Case in point is Scott Colangelo, chairman and managing partner at Prime Capital, a leading and one of the fastest-growing RPA and RIA aggregators, who hired Jania Stout to lead its retirement efforts. When one of Scott’s wealth clients asked for help on their DC plan decades ago, he admitted he was not a DC expert but would try. Thinking he had to meet with every participant under the “know your client” FINRA rule, he spent two weeks meeting with employees, increasing participation rates from 31% to 86% and contribution rates from 2.9% to 8%. “It changed my life,” noted Scott. “And it changed the participants’ lives as well.”
Today, Prime Capital hires and trains salaried young professionals to be “financial coaches” with a servant attitude using managed accounts to risk profile participants that Scott claims keeps them in the market during downturns and improves outcomes. Prime Capital competed and won a $450 million DC plan run by an institutional investment consultant that did not interact or educate participants, and another RPA, which both bid $110,000. Prime Capital won the plan at $80,000 and then met with every participant at 121 locations over 2 1/2 months, converting $180 million into a managed account for which they were paid 30 basis points, or $540,000, annually. Colangelo does not believe in using managed accounts as the default.
Most firms like Captrust focus on using education to find high-net-worth or mass affluent participants in the plan with significant assets, but few like Prime Capital do mass education. “The industry needs to change and bring in young people who, in turn, become RPAs,” stated Colangelo. “Yes, it’s hard work, but it’s worth it.” Certainly, Zoom and the adoption of virtual meetings help.
Financial Finesse, which recently won a 2025 WealthManagement.com Industry Award, employs CFPs, technology and AI to work through larger plans. Record keepers like Ascensus, asset managers like American Funds and bigger advisory firms acting as financial coaches, referring opportunities to advisors where applicable. The coaches know who the advisor is, and AI-driven searches screen out services not offered by the provider or advisor.
“People are more suspicious than ever about sales pitches,” noted Liz Davidson, Financial Finesse’s CEO and founder. “Education builds trust. People know what they should be doing but don’t act.” Her company’s systems and processes focus on closing the action gap, providing the ability to make decisions quickly and efficiently and identifying what services the participants might be interested in.
“Cost is an issue, especially for smaller plans,” explained Davidson.
But if people or organizations do not pay for a service, will they value it? And though auto features yield tremendous results, they are not personalized and do not create engagement.
Rebecca Hourihan, CMO and founder of 401k Marketing, tells her advisor clients, “Stop looking at plans and start looking at people.” Although over the last three years she has seen an uptick of focus on participants, she warns, “Advisors need an engine and the right people on their team. They don’t have to be part of a big team, but they do need a mindset of sitting down with participants as a mentor focusing on education, not sales.”
The advisors with the capacity, tools and proven ability to educate participants with the goal of improving outcomes have a distinct advantage over Triple F advisors, who will struggle to win the plan and compete on pricing.
And though the focus on participants may pit some advisors against some providers with similar agendas, any advisor who has the trust of the plan sponsor that hired them and, in turn, their employees who cannot compete against hordes of non-fiduciary record keeper telephone reps selling, not educating, with egregious conflicts being exposed in recent lawsuits does not deserve to win the business.
Stop complaining and selling—start educating.