Third-Party 401(k) Access Tools Banned in Missouri

Missouri recently brought the MC Hammer down on financial advisors, telling them, “U Can’t Touch This.”

The Show-Me State moved last month to prohibit financial advisors from using credential-sharing technology to manage clients’ held-away 401(k) assets, making it the first state to formally restrict the practice. Advisors can still use the technology to review client information, but they cannot use it to place trades or rebalance accounts. The rule is scheduled to take effect at the end of December.

What was once a dispute between financial services firms and technology providers is now a regulatory issue, raising questions about whether other states will follow Missouri’s lead. The measure could make it more difficult for advisors to provide comprehensive advice on clients’ 401(k)s. But there is an understandable argument for investor security, said Jania Stout, president of retirement and wellness at Prime Capital Financial, noting that she hopes the controversy leads to better ways for advisors to manage workplace retirement accounts.

“I could see other states following suit. But even if they don’t, it’s already getting harder and harder to use credential-sharing tools,” she said, adding that recordkeepers regularly contact customers to warn them against using the tools and require them to update their passwords every couple of months.

Let Us In

The issue began getting attention in 2024, when Fidelity, citing security concerns, announced plans to prevent credential-sharing technology from being used to access and manage customer accounts. The restrictions ramped up over the following year, with Charles Schwab enforcing similar rules.

In October 2025, Pontera, a fintech platform that lets advisors manage clients’ workplace retirement accounts, criticized Fidelity’s measures, claiming that the recordkeeper was having savers “locked under maximal institutional control” to steer business toward its own services.

This July, Missouri’s Securities Division proposed restricting advisors’ use of the tools under its rules governing dishonest or unethical business practices by investment advisors. The proposal drew several public comment objections:

• Pontera argued the amendment could eliminate a secure way to manage investor accounts, increase burdens on advisors and reduce investor choice and competition.
• The Financial Technology Association warned that smaller advisory firms could be disproportionately hurt by losing access to technology that helps them compete.
• Holmes Osborne, founder of Missouri-based RIA Osborne Global Investors, said existing regulations were sufficient.

More Than One Way To … Missouri’s rule doesn’t prevent advisors from making recommendations about clients’ 401(k)s. Advisors can still walk clients through the process using screen sharing or by sitting alongside them, allowing clients to execute transactions themselves, Stout said.

“It’s not ideal for advisors, but I remember a time when these tools didn’t exist,” she said. “Though the move might stall some advisors from being able to manage their clients’ 401(k)s, there are other ways to do it. They’re just not as efficient.”