In news that will probably come as no surprise to advisors, small-business plan sponsors who work with a financial advisor are more likely to be satisfied with their 401(k) plan than those who don’t, a Guardian survey found. Nearly half of small businesses don’t have a retirement plan, but many are interested in starting one.
All around, the survey, released by the Guardian Life Insurance Co. on Monday, paints a picture of ripe opportunity for advisors.
The study found 61% of plan sponsors who work with an advisor on their plan reported being “very satisfied,” compared with 40% who don’t have an advisor. Sponsors are pretty satisfied with their 401(k) plans in general. Ninety-eight percent said they were very or somewhat satisfied with their plan.
The survey was conducted by Brightwork Partners for Guardian in November and December among more than 450 senior executives. Respondents were responsible for employee benefit plans at firms with between 25 and 249 employees.
The survey found 46% of respondents don’t offer a retirement plan, mostly because it is too expensive. However, 58% of those who don’t offer a plan said they were interested in setting one up sometime in the next three years.
Advisors interested in grabbing some of that business should focus on educating their sponsor clients, as there are a couple of areas where they are confused. The survey found 30% of respondents who don’t currently offer a plan aren’t sure which type is best for their firm.
Fiduciary responsibilities are another source of confusion, with nearly 20% of plan sponsors saying they are unhappy with the level of fiduciary support they’ve received. Another third of respondents weren’t even aware they were the fiduciary to the plan.