401(k) Advisors Need to Pay more Attention to Participants
By Hal M. Bundrick
NEW YORK (MainStreet)--Advisors to defined contribution employer-sponsored retirement plans have had their hands full. As compliance standards have tightened and regulations have expanded, advisors have been focused on responding to the concerns and demands of plan sponsors. But even as employers express a high level of satisfaction with their advisor, they want their FA to pay more attention to 401(k) plan participants, according tonew data from Cogent Research.
Nearly half (48%) of all plan sponsors surveyed utilize a financial advisor, and while the majority (66%) report being very satisfied with the overall level of service that they receive, sponsors nonetheless express concern that their participants' needs are not currently being met. Larger plans are the most concerned about the lack of plan participant services being delivered by an advisor, despite reporting the highest overall levels of advisor satisfaction.
While nearly three-quarters (73%) of all plan sponsors are very satisfied that their FA is accessible to them, only 65% say that their advisor is equally available to participants. And it may be time for advisors to schedule more education workshops: only (60%) of plan sponsors state that they are satisfied with the role their FA plays in educating participants on the plan and its investment options.
This may be a bit of a boost for the job security of advisors that work with 401(k) plans: the research says that sponsors of plans utilizing a financial advisor are significantly more likely to report strong satisfaction with their provider's services. The sponsors particularly appreciate the assistance they receive with resolving participant problems, help with rollover and distribution options, participant website services and investment guidance.
When plan sponsors were asked to assess their overall satisfaction with their plan provider, those with a financial advisor report a 17% higher satisfaction with their provider than those without a FA.
Cogent says the survey included a representative cross-section of 1,500 retirement plan sponsors.
--Written by Hal M. Bundrick