How Emerging Technologies are Democratizing Retirement Benefits Delivery and Management — ShareBuilder 401k - August 20, 2025
By Lane F. Cooper, Editorial Director, BizTechReports - August 20th, 2025
In an economy where 33 million U.S. businesses operate outside the Fortune 1000, the traditional retirement system remains stubbornly tilted toward scale. While large enterprises have long enjoyed structured 401(k) programs and institutional-grade investment options, most small employers—and the vast population of self-employed professionals—continue to be underserved.
But that imbalance is now being challenged by a wave of digital innovation, market realignment, and AI-fueled automation. From cloud-native onboarding to algorithm-driven fiduciary oversight, new technologies are finally making it feasible—and financially rational—for even microbusinesses to offer retirement benefits that rival those of major corporations.
The economics of digital financial services delivery have enabled a new class of fintech challengers to collapse the traditional cost curve. These platforms don’t depend on human advisors to sell plans, nor do they rely on complex actively managed mutual funds to generate intermediary fees. Instead, they deliver low-cost, index-based investment options alongside automated compliance, digital plan design, and fiduciary services.
According to Stuart Robertson, CEO of ShareBuilder 401k, this shift is reshaping the retirement landscape.
“Digital-first platforms make it possible to serve the smallest businesses with institutional-grade benefits,” he says. “We’re able to offer plans in 15 to 30 minutes—plans that provide ERISA investment fiduciary requirements, use low-cost index funds, and generally cost less than half the industry average. That simply wasn’t possible with conventional distribution systems and fee structures.”
Expanding Access in a Digitally Fragmented Economy
The gap in retirement plan access is vast. Roughly 27 million businesses are self-employed individuals while approximately 125,000 have more than 100 employees. Yet only about 715,000 401(k) plans exist nationwide.
According to the U.S. Bureau of Labor Statistics, only 52% of workers at companies with fewer than 50 employees had access to a retirement plan in 2023, compared to 91% at firms with 500 or more.
(Source: BLS, National Compensation Survey, 2023). Include self-employed businesses, and the percentage without access to retirement benefits skyrockets much, much higher.
This disconnect is not just a compliance or cost issue—it’s a structural failure of the benefits market to serve the long tail of the economy. According to industry experts, the core challenge has always been scale. Traditional financial services firms have lacked the incentive to build offerings for low-margin, small-asset clients. Advisory-driven sales models and investment products reliant on management fees simply don’t align with businesses that employ five—or even zero—people.
One of the most disruptive elements of this new model is the move away from advisor-driven plan sales and investment design. In traditional systems, financial advisors play a central role in crafting investment menus and acting as intermediaries—functions that come with fees and/or commissions, and built-in complexity.
Digital-first platforms upend that logic.
“Using built-in 3(38) fiduciary services—typically either not provided or as an add-on in traditional offerings—firms like ShareBuilder 401k manage investment selection through in-house algorithms and certified investment committees. Fund lineups are constructed from low-cost ETFs and passive index funds, creating greater transparency and cost control,” explains Robertson.
EDITORIAL NOTE: A 3(38) fiduciary is a provider that takes full legal responsibility for selecting and managing a retirement plan’s investments, relieving the employer of that burden. This allows small businesses to offer professionally managed, compliant 401(k) plans without needing in-house expertise.
This model also makes it possible to offer “set-it-and-forget-it” options through algorithmically adjusted model portfolios tailored to a user’s age, risk tolerance, and time horizon. For small business owners and self-employed professionals with limited financial expertise, this level of automation is critical to adoption. For more sophisticated investors, they can build their own portfolios from curated line up of high qualify ETFs.
From an operational perspective, disintermediation isn’t just a buzzword—it’s a requirement. “The average self-employed person isn’t going to navigate a broker or fill out paper forms,” Robertson notes. “They need a seamless experience, with help available when they want it, and self-service when they don’t.”
The operational convergence of high-tech and high-touch is where emerging players are differentiating. While their digital interfaces eliminate overhead, many still offer access to licensed advisors for onboarding and education. Human engagement isn’t removed—it’s just reconfigured.
New Economics for a Modernized Retirement Market
Traditional retirement providers have long struggled to serve small plans profitably. Distribution through financial advisors comes at a cost. Investment menus are often tied to revenue-sharing agreements. And onboarding a five-person company can take just as much effort as a 500-person one, with far less return.
Digital platforms flip this script. With fixed-cost pricing, automated setup, and minimal reliance on human advisors, the marginal cost of onboarding new clients drops dramatically. SaaS economics allow for subscription-based fees, performance-based asset management charges, and pricing tiers that scale as clients grow.
For the self-employed, the economic argument is even more compelling. A solo 401(k) plan can deliver far higher contribution limits than a traditional IRA—up to $70,000 annually depending on income—while offering features like Roth contributions and loan access not available in other vehicles.
As Robertson explains, “We’ve built a model where the first $500,000 in assets gets you one price, and as your savings grow, your fees drop—uniformly. It’s simple, transparent, and aligns incentives.”
In an industry often opaque about fees, this model stands out. The average expense ratio of funds used in these plans is around 0.06%—far below the industry average—and advisory fees can fall below 0.25% with scale. By contrast, the average total plan cost for small 401(k) plans (under $5 million in assets) was 1.23% in 2023, according to the latest data from the 401k Averages Book. (Source: 401k Averages Book, 2023)
The economic barrier to entry is no longer structural; it’s informational.
AI and the New Frontiers of Plan Management
The rise of generative AI is introducing a new wave of optimization for retirement platforms. On the engineering side, AI is being used to automate quality assurance and standard code generation—potentially reducing development costs and accelerating time-to-market for new features.
But the more transformative use cases are appearing in service and operations. AI-powered sentiment analysis is being deployed to analyze customer service interactions, helping ensure quality and consistency at scale. And as firms begin to explore AI-driven investment modeling, the potential for real-time portfolio optimization and retirement drawdown strategies is growing.
The goal, says Robertson, is not to replace humans—but to elevate the value of human work.
“We’re aiming for 30 to 40% of code to be AI-assisted within a year,” he says. “That frees up our engineers to focus on strategic design and business needs. On the service side, AI is helping our team and key vendor deliver a more consistent, empathetic experience by analyzing call tone, resolution quality, and intent in real time.”
Looking ahead, ShareBuilder 401k is exploring the application of AI in retirement income modeling—an area traditionally dominated by financial advisors. The objective: deliver personalized income strategies that adjust to market conditions and life expectancy, without the need for high-cost planning services.
According to McKinsey, generative AI could automate up to 30% of financial advisory tasks by 2030, potentially reducing service costs and increasing plan access across underserved markets. (Source: McKinsey & Company, “The Economic Potential of Generative AI,” 2023)
Retirement’s Reinvention Has Begun
The U.S. retirement system is overdue for reinvention—and it’s happening from the bottom up. As technology platforms rethink how plans are sold, priced, and administered, the democratization of retirement benefits is no longer a theoretical goal. It’s a market reality.
By leveraging cloud infrastructure, fiduciary automation, and AI optimization, new entrants are proving that small businesses and solo entrepreneurs can receive the same quality of retirement service once reserved for the Fortune 500.
The implications are significant: a more inclusive financial system, better long-term outcomes for millions of workers, and a new model for how fintech can scale trust at the edge of the economy.
And as this transformation accelerates, the firms that combine digital delivery with fiduciary accountability and scalable economics will shape the next generation of financial wellness.