Now here’s a study finding that comes as no surprise to 401k Specialist: Plan sponsors see a positive impact and value in having a plan advisor oversee their workplace retirement plan to boost retirement plan participation and outcomes.
Hey, tell us something we don’t know! And are you listening, business owners?
87% of plan sponsors reported that offering access to a plan advisor with a workplace retirement plan delivers better retirement plan outcomes
According to new research released today from Morgan Stanley at Work’s inaugural workplace retirement study, plan sponsors cite peace of mind as a leading benefit when it comes to having plan advisors drive employee engagement and investment guidance—which eases internal concerns, adds value to the participant experience and decreases the pressure of administrative tasks.
In addition, while investment management is cited as the No. 1 reason plan sponsors consider advisory services, they also view relationship building—including accessibility, responsiveness and consistency—as key in growing corporate retirement plans.
Among the report’s key findings, plan sponsors believe retirement plan advisors:
• Boost retirement outcomes: Eighty-seven percent of plan sponsors reported that offering access to a plan advisor with a workplace retirement plan delivers better retirement plan outcomes.
• Have increased participation rates: Nearly 45% of plan sponsors with a plan advisor noted that 75-100% of eligible employees are enrolled in their company’s 401k versus only 33% of plan sponsors without a plan advisor.
• Deliver investment oversight: The top reason plan sponsors cite working with a plan advisor is to provide oversight of investment management, with 28% of the population selecting that choice.
• Provide more choice: An overwhelming number of plan sponsors (88%) agree that a plan advisor offers robust plan features with a range of investment options. In addition, respondents stated plans with an advisor tend to offer added features like automatic match, match options and auto enrollment that help better engage participants and increase retirement savings.
• Deliver ROI: 95% of plan sponsor respondents said the fees associated with a plan advisor is well worth the cost given the investment management (28%), fiduciary guidelines (67%) and compliance (75%) considerations.
“As a fiduciary of their workplace retirement benefits, plan advisors can play a central and critical role in helping employees reach their long-term investment and retirement goals, while helping employers attract and retain top talent,” said Anthony Bunnell, Head of Retirement for Morgan Stanley at Work. “Financial Advisors are an often-overlooked resource that can enhance and support the work plan sponsors do, while forging long-term, valuable relationships with their most mission-critical talent.”
The findings in the 2022 Value of the Financial Advisor report are based on proprietary, third-party research and survey data conducted by Rebel & Co. of 350 plan sponsors at companies with 20-3,000 employees that offer financial benefits including a 401k plan across various industries in the U.S. These companies have either a dedicated financial advisor with their 401k plan, has worked with an employer in the last 12 months that offered a 401k plan or currently involved in selecting or managing the company 401k plan.
Morgan Stanley at Work’s Value of the Financial Advisor study can be found here.
SEE ALSO:
• ‘Auto Reenroll Act of 2022’ Seeks to Boost 401k Participation
• Retirement Consulting Firms Find New Paths May Be Necessary to Compete
• Forever Fiduciary: Blaine Aikin’s Take on Where We Are