Chief Justice John Marshall famously wrote in McCulloch v. Maryland that “the power to tax is the power to destroy.” In today’s retirement plan business, I’d argue there’s a modern parallel: the power to assign a financial advisor to a particular Pooled Plan Provider (PPP) can be the power to get you fired.
Trust is everything in this business. Advisors hand over their clients, their reputation, and their livelihood to providers they assume are acting in good faith. When that trust is misplaced—especially in the PEP space—the consequences can be brutal. Pick the wrong PPP, or worse, one aligned with an unscrupulous TPA that has its own conflicts, and you may find yourself suddenly unnecessary.
That’s why the current PEP landscape sometimes feels like the TV show Survivor. Everyone smiles. Alliances are formed. And all the while, you’re just trying to make sure you don’t get voted off the island.
I know this from experience. I worked for years on a Multiple Employer Plan as a plan fiduciary and sponsor, alongside an advisor, trying to build something meaningful and sustainable. Then one advisor decided the plan should be converted to a PEP and expected me to “volunteer” to give up my fiduciary role—for nothing. That didn’t happen. And it never should.
Any transition—MEP to PEP or otherwise—has to preserve existing interests, roles, and value. If it doesn’t, someone is getting squeezed out, and it’s usually not the provider with the marketing budget.
The lesson is simple. Before signing onto any PEP arrangement, consult with ERISA counsel. Make sure assignment rights, fiduciary roles, and economic interests are clearly defined and protected. Because in this business, the wrong deal doesn’t just hurt—it can end your seat at the table.
