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I completely agree they are pricing those plans at a loss. Empower and Fidelity are using that as a loss leader for additional services like rollovers. Their target capture rate is 70% of rollovers leaving the retirement plan.
Interesting and shocking
Group plans 🤷♂️
I’m seeing this too. It’s the answer to some in acquisition mode. Instead of buying others out (like Empower is), some RKs are pricing ridiculously low and likely hoping to pick up revenue on managed accounts or rollovers.
Investment companies have been pricing their record keeping at a loss for years. They do this in order to get the assets and make their money on the investments. It’s a loss leader.