At first glance, opportunities in 401(k) plan management look like they've lost their luster in recent weeks. Vanguard's new bundled service for plans with assets of less than $20 million is likely to grab a piece of the action from financial advisors. The U.S. Department of Labor has also pulled its proposed rule to tighten the definition of fiduciary-which had been expected to drive away many broker-dealers and those advisors just dabbling in the space.

The reality is that there's still much potential to build a lucrative practice here if you're patient, persistent and prepared to compete, say advisors who've carved out a significant niche in the space.

For starters, plan sponsors haven't been shy about seeking help. About 81% of plans are managed by an advisor, according to the 2011 Mid-Year Opportunity Index from the 401kExchange, a consultant serving the small and midsize markets. That's up from about 75% in 2008. Additionally, 8.9% of plans that don't have an advisor are considering adding one and approximately 12% of plan sponsors surveyed are looking to change advisors.

So what specifically does it take to succeed in this business?

"Advisors who want to get in need to know that it's difficult or impossible not to be at least a 3(21) fiduciary," says Nick Della Vedova, the president of 401(k) Advisors, an RIA in Aliso Viejo, Calif., referring to Section 3(21) of the Employee Retirement Income Security Act.

Many plan sponsors are nervous about added exposure under Labor Department fee disclosure regulations scheduled to go into effect next year and want someone to share the burden. The Labor Department also plans to re-propose a rule on the definition of fiduciary in early 2012.

401(k) Advisors, which manages more than 300 retirement plans representing $14 billion in assets, works in a 3(21) or 3(38) fiduciary capacity depending on clients' needs, says Della Vedova. Networking with employers' centers of influence, including their health and property-casualty brokers, has been a key factor in growing its practice.

Unlike many advisors who think they need to move clients from provider A to provider B to add value, the firm keeps more than 90% of its new clients with their current providers. "We analyze what they have with A and how to make it better," he says.

401(k) Advisors has developed proprietary technology for service provider comparisons. In 2005, the firm started the Retirement Plan Advisory Group, a network which provides more than 370 advisory firms with access to systems, technology and resources.

"Ultimately, you need to have systems, processes and focus. ... Spending eight hours a day on reports and two hours a day with clients and prospects doesn't work," says Della Vedova.