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Employees Want Control of Retirement Assets, Expect Guidance

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ING Retirement Research Institute released a white paper Monday outlining employees' retirement dilemma; namely that while employees want control of their assets, they're not sure about how to invest them, and turn to their employers for guidance.

The paper, based on research conducted for ING by Boston Consulting Group between May 2010 and August 2010, found that almost half of employees don't feel in control of their retirement plan. Employees want regular contact from their employers on advice and services, especially regarding asset allocation and how to calculate what they'll need in retirement.

"We wondered why, with all the research out there, aren't workers saving?" Ashley Agard, head of the ING Retirement Research Institute, told AdvisorOne. The reason, ING found, is that workers are confused and overwhelmed.

"Employers do a very good job with in-plan advice," she said, "but workers are looking for broader, more holistic advice."

The paper cites several roadblocks to employees' retirement plan:

  • Too many choices. Too many investment options can be overwhelming.
  • Good old-fashioned procrastination. Workers know they need to save, they just don't.
  • "Hyperbolic" discounting. Workers overestimate the sacrifices they'll have to make to save.
  • They want it to be easier. Workers want to be in control, but they also want planning to be convenient.
  • They want to be told what to do. Workers want clear direction in what they need to do, and how much they need to save.

"Employers are very interested in helping workers retire," Agard (left) said. "It's the right thing to do, it's a smart business decision. Consumers want to be empowered, yet they're feeling very confused. Employers need help introducing tools and resources to give workers a roadmap."

"For advisors, the biggest need is to help employers understand what participants need, how they're feeling and what they want." Agard reiterated workers' interest in holistic advice adding that workers want to be in control but are looking for very prescriptive solutions for different periods of their lives.

"The study was enlightening for us," Agard concluded. "The Institute's basis is to understand the mindset, emotions and behavior behind why people do what they do. The products of the future will be built around advice."