It really is the cornerstone of advisor skills, and yet too many are failing at this basic task.
Almost half of 401(k) participants forgo the use help of an advisor when offered, preferring to rely on their own financial acumen in making retirement savings decisions.
The reason, according to a recent Spectrem report titled, “Advisor Usage Among DC Plan Participants?” Dissatisfaction with account statements and face-to-face meetings with advisors. More specifically, of the top five reasons investors said they would fire an advisor, four were about communication and only one related to performance.
In addition to poor marks for statements and meetings, the study found that “excellent” ratings were low for newsletters (15 percent), blogs (2 percent) and social media (2 percent). Nearly half of respondents rated advisors’ blogs (46 percent) and social media activity (50 percent) as poor.
However, for some reason, advisors seemingly got a reprieve. The percentage of participants who said they are likely to drop or replace their advisor in the coming year has declined by three percent from the previous year to nine percent.
“Providers have a significant opportunity to retain and grow their business by strengthening their engagement with plan participants,” Spectrem President George H. Walper Jr. said in a statement. “As the U.S. population ages, these opportunities for engagement will only increase, since more than 30 percent of plan participants say they will be seeking advice on planning for long-term care, implementing tax-advantaged strategies and establishing an estate plan.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
