For many planners, the best customer is the new retiree who walks in the door with a big bag of money and says: "Manage this please." You didn't know him when he was in his fifties or forties. You may not have met him until his sixties. But you're sure glad he's sitting in your office now, and you know you can deliver a lot of value for him.

What if he never knocks on your door? What if the lay of the land changes so dramatically in the next five years that the same bank, insurer or mutual fund company that sells a 401(k) plan to your would-be client's employer can offer him advice, long before he retires? And what if he gets to set aside money on a tax-free basis, much like a flexible spending plan, to pay for the advice? Will this would-be client still walk in your door at retirement seeking your help? Or will he keep the same "advisor" he's had for years, the one from the financial services company that administers his 401(k) or 403(b) plan?

Sound far-fetched? It's not. On April 11, the U.S. House of Representatives approved a sweeping bill (H.R. 3762) that would open the advice door to plan sponsors and give employees a tax-free vehicle for buying the advice.

In fact, the future of the retirement rollover market should be on every planner's mind these days as the financial services lobby in Washington continues to advance legislation that, for the first time in decades, would open the advice market to 401(k) plan providers. As an incentive for plan participants to use the advice, they would be able to pay for it with tax-free money from a flex-like account.

The legislation cleared the House and now is pending in the Senate, where a second and similar bill, S. 1978, was introduced on March 13 by Sen. Tim Hutchinson (R-Ariz).

"Big companies are already working very hard to step up their advice offerings and retain rollovers, and they're getting better at it all the time," says Dee Lee, CFP, who conducts educational seminars for corporate and government employees and plan participants. "Aetna, for instance, is hiring CFPs to staff their advisor teams. They're doing all the right stuff to appeal to retirement plan administrators." The days of people in their early twenties presenting enrollment sessions under the guise of education are disappearing, says Lee, who gave up her planning practice to launch Harvard Financial Educators in Harvard, Mass., several years ago.

If the legislation becomes a reality, "planners will need to begin marketing their services much more aggressively," Lee adds. "I do think this kind of change will start taking away potential clients who might come in with lump sums at retirement."

Although planners would be able to compete with plan providers to offer advice, 401(k) plan work already is highly specialized and labor intensive, even for the biggest independent planning firms. And it's unlikely that independent advisors will have access to huge corporations or the ability to provide advice for hundreds of employees at any one company. "It may be difficult to compete at certain levels because you'll be going up against folks who work for companies with household names," says Phillip Cook, CFP, president of the planning firm Cook & Associates in Torrance, Calif.

No doubt independent planners will have the opportunity to work with companies where executives and owners are already clients, but capturing the advice market will be increasingly difficult. And without capturing it, they'll almost surely see many of their rollover prospects gobbled up as they become clients elsewhere long before they retire.

The Senate still is debating the shape such legislation should take. Some Democrats openly are reluctant to give free rein to financial institutions that purposely have been kept out of the advice market because of fear that conflicts of interest could harm employees. But what remains steadfast is the mounting pressure on lawmakers to do something quick to encourage baby boomers and others to seek advice and shore up their retirement assets. The simple truth is that the next few generations of retirees have not accumulated the assets to replace the defined pension plans their parents had. Forty-four percent of workers have socked away less than $10,000 in a 401(k) plan, and only 13% have balances greater than $100,000, according to the Investment Company Institute. The 2002 Retirement Confidence Survey from the Employee Benefit Research Institute tracks those findings almost dollar for dollar.

Another boon for such legislation? It's relatively cheap, costing just $261 million over 10 years, according to a Joint Committee on Taxation estimate.

Can anyone argue that providing more Americans with financial advice is a good thing? After all, mounting evidence finds that people do better if they have a plan. One Consumer Federation of America study found that middle- and upper-income Americans saved twice as much if they had a financial plan. A new study from AIG SunAmerica found (surprise!) that of more than 1,000 retired Americans, those with a plan and higher assets were happier.

For people who work in and around the advisory industry, the positive power of planning is no surprise. But the fact that advisors may get to do it for fewer retirees in the future may be a nasty shock.

"I can very much see this happening," says Peg Downey, a partner in Money Plans in Silver Spring, Md. "I'm hired by clients, business owners or executives, to do workshops for their retirement plan participants. I may work with the president and officers, but not their employees, despite the fact that I'll work with them on an hourly basis. If they turn to anyone, it's usually the commission-based folks who sell their plan."

Granted, not everyone wants to work with rank-and-file employees. But think of the potential volume. If financial institutions can tack on 25 or 50 basis points to each individual's account in exchange for some kind of advice-and insurers and broker-dealers already are pricing these services-it may be a highly profitable business. And once brokers, insurance salespeople and others have captured relationships, how easy will it be for independent planners to try to cherry-pick all but the wealthiest officers and executives?

Big institutions will capture assets and have the ability to snare what will be, in effect, a pretty captive advice market. Some employees and managers may well turn to "a second tier of advice from independent planners," as Downey and other advisors suggest. But they would have to go outside the advice provider their company is offering. "Employees really do see it as company authorization when an advisor gets in front of them," Lee says. How many employees will find a planner outside their company's plan? Planners say they already see large money managers such as TIAA-CREF aggressively capturing client relationships and rollover assets from their widespread retirement plan work with teachers and other groups. If that model moves into the private sector, the impact could be far-reaching.

It might be easy for advisors with established practices to shrug off the impact any new 401(k)-advice legislation will have. But it wouldn't be wise. Rollover clients are the bread and butter of many planners' practices. Many middle-class people get to be highly desirable clients when they get access to their retirement plan assets. If financial institutions get better at delivering advice, they may well win a growing number of would-be clients away from advisors. "Across the board, I'm seeing companies get more aggressive at selecting and educating the personnel doing their 401(k) plan education," says Lee, who did more than 25 education sessions last year.

Lee sells no products, and she often is hired by large companies to provide their workers with education on plans that are sold by very large institutions. "They aren't always great educators, but they're getting better. They definitely working at it," she says.

Of course, advisors can't very well fight an initiative that promises to be good for consumers simply because it might put them at a competitive disadvantage. Instead, the Financial Planning Association has given what Duane Thompson, its director of government relations, calls "qualified support. As we've stated, we have qualifications for fully supporting a bill that might open up advice to other groups that may not be able to overcome their conflicts of interest."

In short, the FPA would like to limit the advice market to registered investment advisors. In a letter he sent to Congress last year, Thompson said the goal of making advice more accessible to employees is laudable. "However, since the primary ethics requirements of CFP practitioners and FPA members is to place the interest of the client ahead of the advisor-and this is not necessarily the case with other entities who might qualify as advisors in the legislation-we do not think the legislation will maintain investor protection."

Thompson also says that representatives from banks, insurers, broker-dealers and others who will be able to offer advice under the legislation are not fiduciaries and are not required to meet minimum competency standards, as investment advisors are. Also, it's unclear how the Department of Labor, which is responsible for enforcing ERISA, would be able to examine or regulate the variety and volume of entrants into the new pension advisory market. "Advice is a good goal," Thompson adds. "We just want to ensure that consumers are protected."