Bank of America Merrill Lynch and Wells Fargo are reportedly vying to run Wal-Mart Stores’ 401(k) programme, which has US$15.6 billion in assets.
BofA Merrill Lynch, which has been administering the account for 15 years, may very well retain it, although Wells Fargo is considered to be a strong contender for the job.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
"Despite Wal-Mart’s long relationship with Bank of America Merrill Lynch, Wells Fargo could be a credible competitor, given that it has experience serving other large retailers," Reuters quoted Martin Schmidt, an independent retirement plan consultant in Chicago, as saying.
"Wells Fargo has been really aggressive in moving up-market," Schmidt reportedly said.
The importance of Wal-Mart’s 401(k) program for employees to wealth management giants is clear from the very size of the assets concerned. Wal-Mart has more than 1.2 million people participating in its retirement plan, which has an average account balance of US$15,000, according to BrightScope, which tracks and rates retirement plans.
Wells Fargo has been aggressively expanding its business beyond the traditional loans-and-deposits offerings, and the wealth management business figures high on the bank’s priority list.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataFor BofA Merrill Lynch, Wal-Mart’s US$15.6 billion in assets form an important, albeit small part of more than US$2.1 trillion in assets of its wealth management arm.
In keeping with best practices, companies should put their 401(k) plans out for bid every five years to make sure they are getting the best pricing and service, but very few do, Martin Schmidt told Reuters .
However, recent regulations forcing plan administrators to disclose their fees to plan sponsors have caused more companies to put their plans up for bid.
