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Retirement Planning > Saving for Retirement > 401(k) Plans

Retirement Plan Advisors Are Well Worth Their Fees: Survey

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Plan sponsors in a study released this week by Morgan Stanley at Work reported a positive effect and value in having a plan advisor supervise their workplace retirement plan to boost participation and outcomes.

Plan sponsors cited peace of mind as a leading benefit for hiring plan advisors, according to the research. Doing so eases internal concerns, adds value to the participant experience and decreases the pressure of administrative tasks. Those with advisors overwhelmingly said the cost was worth it.

Plan sponsors cited investment management as the primary reason they consider advisory services, followed by guidance on fiduciary and regulatory matters. They also viewed relationship building — including accessibility, responsiveness and consistency — as key in growing corporate retirement plans.

“Financial advisors are an often-overlooked resource that can enhance and support the work plan sponsors do, while forging long-term, valuable relationships with their most mission-critical talent,” Anthony Bunnell, head of retirement for Morgan Stanley at Work, said in a statement.

Morgan Stanley has been investing heavily in the retirement plan channel since it bought stock-plan administrator Solium Capital, now Shareworks by Morgan Stanley, in 2019.

“As we’ve said before, we see the channel as a funnel for client and asset acquisition to sustain growth going forward,” Morgan Stanley CEO James Gorman said on an earnings call in January. We now have over $500 billion of unvested assets, and expect to retain an increasing proportion of these assets as they vest.”

Rebel & Co. conducted the survey online and by phone in February among 350 plan sponsors at companies across the U.S. that offer financial benefits, including a 401(k) plan. Companies in the sample had a workforce ranging in size from 20 to 3,000.

Plan Advisor Advantages

Eighty-seven percent of plan sponsors in the survey reported that offering access to a plan advisor with a workplace retirement plan delivers better retirement plan outcomes.

Forty-five percent of plan sponsors with an advisor on board reported that between 75% and 100% of eligible employees were enrolled in their company’s 401(k), compared with only 33% of plan sponsors without a plan advisor.

A vast majority of plan sponsors surveyed said a financial advisor offers robust plan features with a range of investment options. 

They also said plans with an advisor tend to offer added features that help better engage participants and increase retirement savings, such as automatic match, match options and auto-enrollment.

Ninety-five percent of plan sponsor respondents said the fees associated with a plan advisor are well worth the cost, with 75% citing compliance considerations, 67% fiduciary guidelines and 28% investment management.


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