Fidelity’s Advisor 401(k) platform is booming.
The platform, offered via third-party advisors to small- and mid-sized companies, recorded record growth in 2007, Fidelity says, with total record-kept assets ending 2007 at $21.2 billion, a jump from the $16.8 billion recorded at year end 2006. Also for 2007, 516 new plans were funded, Fidelity says, up 21% from 2006, and the 401(k) platform reached a new high for total plans serviced with 2,825, a 15% increase.
The Pension Protection Act, along with individuals taking more responsibility for their retirement savings, are driving the advisor-sold 401(k) market, Fidelity says.
Fidelity says it has seen increased adoption of automatic enrollment by employers. For instance, according to Fidelity:
- At year-end 2007, 304 Fidelity Advisor 401(k) plans were utilizing auto enrollment, a nearly 15-fold increase from 2006;
- Employees in Fidelity Advisor 401(k) plans offering auto enrollment, who were eligible to be auto enrolled, had participation rates of 72%, compared to 62% in plans without auto enrollment;
- 65% of Fidelity Advisor 401(k) plans offered participant-elected automatic annual increases, compared to 51% in 2006;
- More than 45% of Advisor 401(k) plans offered Fidelity Freedom Funds as the plan default, more than double the 2006 level.