Employers who partner with a retirement plan advisor enjoy superior outcomes in respect to their retirement plans than those who don’t, new research reveals.
Retirement Advisor Council discloses this finding in a study of 400 employers that sponsor a 401(k) or 403(b) plan. The survey is based on responses to questionnaires administered to 407 plan sponsored in September 2013.
The report indicates that more than 40 percent of plans with a retirement plan advisor retain the advisor to meet one-on-one with employees to provide investment advice.
Among plans that partner with an advisor who works exclusively with retirement plans, 83 percent have experienced deferral rate increases in the last two years. And one-third of those have enjoyed a deferral rate increase of 6 percent or more.
“These compelling numbers testify to the participant outcome enhancement Professional Retirement Plan Advisors enable,” the report states. “We now have evidence at the macro level that the profession is making a difference on the population as a whole.
“Fully three-quarters of plan sponsors partnering with [an advisor] estimate 50 percent or more of their participants are on track to achieve a successful retirement,” the study adds.
The report notes also that more than 95 percent of plan sponsors who partner with an advisor dedicated exclusively to retirement plans report that partnering is either “very beneficial” or “a necessity.” More than a third qualify the relationship as a “necessity.”
Most clients either agree (34 percent) or strongly agree (60 percent) that the amount of time they spend on their plan is “reasonable.” And 53 percent of clients of professional advisors who work exclusively with retirement plans say their advisor does an “outstanding job” assisting them with the implementation of the fiduciary process.
“Plan sponsors who retain their services of a Professional Retirement Plan Advisor entirely dedicated to the business reap tremendous benefits from the partnership,” the report states. “Most salient is the enhanced participant retirement readiness that stems from repeated measurements, participant reporting, plan design changes, participant guidance and advice.”