[FilmCriticAwezume]

A few things here, Jon:

1) The basic premise is probably true; 401(k) plans generally do not (never?) offer brokerage account functionality, i.e. the ability to buy and sell individual stocks, bonds etc. For that reason, money which goes into a 401(k) will have to go through to some money manager

2) However, most 401(k)s do offer very low-cost index funds which charge between 5 and 25bps per annum, which is a pretty cheap way of getting high diversification. I am quite happy to pay, IIRC, 6bps to State Street for my large cap US exposure, 10 bps for my small and midcap US exposures and 20bps for my emerging markets exposure in my 401(k)

3) IRAs are not limited in the same way that 401(k)s are, therefore anybody with income under ~160k can put something like 5k a year into a brokerage account which has similar tax benefits to a 401(k)

4) Investment management existed before 401(k)s and would exist even if 401(k)s offered brokerage account functionality. And the comparison of the makeup of equity owners in 1945 and today is disingenuous; mutual funds were still pretty new in 1945, and since then people have come to understand far better the benefits of diversification that a small investor can only efficiently achieve through a money manager (whether an index fund or an active money manager)

5) Investment management for the retirement accounts of individuals is only a small part of what most financial companies do. There are, of course exceptions (who are money managers first and foremost), but the average firm on the Street is not reliant on the revenues from 401(k) management fees