Plan sponsors’ satisfaction with their 401(k) plan advisor increased this year, continuing an upward trend that has been maintained since 2008.
So reports Fidelity Investments in the 4th iteration of its “Plan Sponsor Attitudes Survey.” The company polled 937 administrators of 401(k) plans, the defined contribution arrangements ranging in size from 25 to 10,000 participants.
The report reveals that 62 percent of 401(k) plan managers — among them CEOs/business owners, CFOs/finance executives, HR heads/benefits executives and other plan administrators — are satisfied or very satisfied with their 401(k) plan advisor. This compares with satisfaction levels of 60 percent, 57 percent and 55 percent, respectively, in 2012, 2010 and 2008.
Despite the rise, the survey observes that nearly four in 10 plan administrators remain less than satisfied with their advisor. And a still notable share (10 percent) is actively looking to switch advisors. This compares with 14 percent, 16 percent and 17 percent of plan administrators in 2012, 2010 and 2008, respectively.
Of the 10 percent of sponsors who are looking to bolt, more than one in three (31 percent) say they need a more knowledgeable advisor. An additional 28 percent of the respondents flag “servicing issues with the plan provider.” And 12 percent say their advisor is not adequately supporting the plan.
Among the top-three ranked advisor services identified in the report are the following:
Providing performance information on investment options and guidance on potential changes (75 percent);
Providing employee education on investment selection (49 percent); and
Analyzing participation rates, deferral rates, investment allocations and strategies for improving plan performance (32 percent).
When asked what their advisors don’t do, the survey respondents flag the following:
Report how much time is spent working on the plan (78 percent);
Report on types of activities for the plan (69 percent); and
Demonstrate how plan performance improved (60 percent).
Nearly 6 in 10 of the survey respondents say they don’t think participants are saving enough for these reasons:
Current living expenses are too high (86 percent);
Health care costs are rising (57 percent);
Distrust of financial markets (39 percent);
Lack of education about savings choices (33 percent);
Participants’ inability to make the decision to save more (27 percent).
Nearly two-thirds (66 percent) of plan sponsors report that some, quite a few or all employees are delaying retirement. The number of workers expecting to retire after age 65 has increased to 37 percent from 11 percent. And the average account balance of participants ages 65-70 is only $140,000.