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FIDELITY PLAN SPONSOR SURVEY – NEARLY 40% SEEK NEW ADVISOR

Fidelity Plan Sponsor Survey

Fidelity Plan Sponsor Survey: Nearly 40% Seeking New Advisors. Retirement plan sponsors can reap many benefits from working with an advisor. And for the most part, the sponsors who do are pretty satisfied, according to a recent Fidelity survey. Nonetheless, some sponsors are on the hunt for new advisors, despite high levels of satisfaction.

The 2017 Fidelity Plan Sponsor Attitudes survey, which included 1,106 plan sponsors who used a variety of record keepers (not just Fidelity), and have at least 25 participants and $10 million in assets, found that 65% of sponsors are satisfied with their advisor, and 57% are satisfied that their retirement plan is meeting company objectives. That said, sponsors’ overall satisfaction with their advisors declined slightly in 2017, and 38% are actively looking to switch advisors. That’s up from 30% in 2016.

Sponsors have high expectations of their plan advisors, and rightly so. A lot of responsibility rests on sponsors’ shoulders, especially when it comes to improving plan participants’ retirement outcomes, as well as handing the day-to-day challenges of managing a defined contribution (DC) plan along with other employee benefits. Their top priority, therefore, is partnering with advisors who can support them in achieving those goals.

The service sponsors value most in an advisor? Retirement plan expertise. Thirty-four percent of sponsors Fidelity surveyed indicated they valued this advisor service above all others. Also highly valued is an advisor’s ability to understand the needs of the company and employees (18%), investment expertise (17%), and assistance in complying with fiduciary obligations (15%).

What’s more, sponsors are upgrading their retirement plans at a record pace in response to the current legal and regulatory environment. Plan features and designs that are focused on improving overall retirement readiness, that help plan sponsors fulfill their fiduciary obligations, and that meet participants’ needs are of paramount importance. In the past two years, 93% of plan sponsors have made an investment menu change, and 92% have altered their plan design. Increasingly, sponsors are relying on retirement plan advisors to help inform these critical decisions.

If you’ve been approached by a retirement plan advisor and you’ve considered making a switch, you’re not alone. A majority of plan sponsors — 55% — confirmed that a recent advisor inquiry piqued their interest, Fidelity found.

And it’s okay to shop around. When it comes to finding the right advisor partner, it’s like dating before marriage. You need to make sure “the one” meets and understands the needs of your plan and participants, and can more than adequately support the goals you’re striving to achieve. in short, you need to understand the value your advisor brings to the table and how they can benefit your plan.

The Fidelity survey also found that reducing business costs associated with having a retirement plan was a top concern for sponsors, with 31% citing it as a priority. Managing fiduciary responsibility (23%), preparing employees for retirement (22%) and litigation and liability risks (18%) were also common concerns among plan sponsors.

The bottom line: If you’re a plan sponsor, you’ve got a lot of responsibility, and likely a lot on your mind. A satisfactory and value-add advisor relationship can help make your life easier, as long as it’s the right fit.

Robyn Kurdek

Robyn Kurdek

Freelance writer with nearly 2 decades of financial industry experience, with niche expertise in the defined contribution (DC) industry. I also have defined benefit (DB) plan knowledge. I write all types of content for retirement plan participants, sponsors and advisors, including web copy, newsletters, white papers, fact sheets, blog posts, financial wellness articles, and more. "I speak DC."
Robyn Kurdek
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