PEPs and the Advisor Opportunity Ahead
As we look at the evolving industry landscape, attention has increasingly turned to pooled employer plans (PEPs)—along with an important question:
“What role does an advisor play within a PEP?”
It’s a thoughtful—and increasingly common—consideration as plan sponsors evaluate how these new structures reshape responsibilities.
The PEP structure is designed to absorb many of the responsibilities that once defined the advisor’s role. While a pooled plan provider (PPP) assumes significant fiduciary liability, many PEPs include a discretionary ERISA 3(38) investment manager. Through these investment managers, investment menus are standardized, reducing the need for ongoing fund selection and monitoring by the plan sponsor.
At first glance, the traditional advisor role may appear to be shifting in scope—but that’s only part of the story.
In reality, the advisor’s role is evolving in meaningful ways.
The value of an advisor in a PEP structure doesn’t go away. It shifts—materially and, in many ways, for the better.
At a fundamental level, two responsibilities remain indispensable.
- Helping plan sponsors choose—and oversee—the right PEP
Not all PEPs are created equal. Differences in governance structure, fiduciary framework, service model, and participant experience can be significant. Plan sponsors still need a knowledgeable advocate to evaluate these variables, guide selection, and ensure the arrangement continues to meet their needs over time.
In other words, fiduciary responsibility doesn’t disappear—it becomes more focused on selection and oversight of the solution itself.
- Championing participant outcomes
This is where the advisor’s role becomes even more critical.
While PEPs streamline plan design and administration, they don’t solve for participant engagement, financial wellness, or retirement readiness. Those outcomes still depend on human connection, behavioral guidance, and personalized advice: all services that can be fulfilled by a 3(38) investment manager.
Advisors are uniquely positioned here. They have the relationships, the trust, and—importantly—the incentives to drive better participant outcomes. As the industry continues to converge retirement and wealth, this shift aligns naturally with where leading advisors are already heading.
A Tale of Two Advisors
For advisors who have embraced this convergence—blending retirement plan consulting with participant-level advice—PEPs represent an attractive opportunity. They remove administrative friction and free up time to focus on higher-value interactions.
For more traditional retirement plan advisors, however, the shift may feel disruptive.
If PEP adoption continues at its current pace, the move away from plan-centric services toward participant-centric engagement won’t be gradual—it will be structural. Advisors who rely primarily on plan design, investment selection, and committee support may find those services increasingly commoditized within a PEP framework.
The Opportunity for DCIOs and Recordkeepers
For firms whose distribution models depend on advisor relationships, this transition creates both urgency and opportunity.
First, there’s a need for education. Advisors must understand how PEPs could reshape their role—not just operationally, but economically.
Second, there’s an opportunity to enable the pivot.
That means equipping advisors to succeed in a model where:
- Value is defined less by plan construction and more by participant engagement
- Revenue is increasingly tied to advice, outcomes, and relationships
- The advisor functions as a strategic overseer of providers, not just a selector of investments
Call it vendor management, governance consulting, or participant advocacy—the label matters less than the shift itself.
The Bottom Line
PEPs are redefining the retirement plan advisor’s role.
The question isn’t whether advisors will have a role in a PEP-driven market. It’s what that role will look like—and who is prepared to step into it.
Those who evolve will find themselves closer than ever to where real value is created: improving financial outcomes for participants.
As the role of the advisor continues to evolve, the importance of selecting the right PEP partner becomes even more critical. The structure, governance, and service model behind a PEP will ultimately shape both the plan sponsor experience and participant outcomes.
At Pentegra, our approach to PEPs is designed with this in mind—combining deep fiduciary expertise, institutional oversight, and a commitment to supporting both advisors and plan sponsors in navigating this next chapter.
Because in a changing landscape, having the right team makes all the difference.
For more information on our PEP solutions, contact the Pentegra Solutions Center at solutions@pentegra.com or 855-549-6689.
For financial professionals only. Not for use with the general public.