Less than a fifth of Americans feel highly knowledgeable and confident about managing their retirement and college savings accounts, according to research released Thursday by Pontera, a fintech company that helps advisors manage clients' 401(k) assets.
Savers surveyed by Pontera said they find the system confusing, restrictive or difficult to navigate. Forty-two percent of respondents reported that managing their accounts makes them feel stressed, anxious, cautious or confused.
“For many Americans, retirement remains a quandary; the Federal Reserve has reported that nearly half of U.S. households have inadequate retirement savings, and 70% of Americans believe their financial planning needs improvement,” Pontera’s CEO, Yoav Zurel, said in a statement.
This comes as rising costs of living and inflation are concerns across all generations of U.S. savers, followed closely by market volatility and economic uncertainty, according to the survey.
These challenges are magnified when savings are spread across multiple accounts.
Savers have responded by rethinking how to approach their investments. The majority reported that they have made changes to their retirement investments in the past year because of market uncertainty. Nearly a quarter of savers said they have either reduced or paused contributions or stopped checking these accounts to avoid stress.
Pontera said these findings highlight the gap between savers’ intentions and their confidence, underscoring the critical role that financial advisors can play in helping clients navigate complexity and make informed retirement decisions. Advisors who can integrate held-away workplace retirement accounts into the broader portfolio are well-positioned to bridge this gap.
Pontera’s research results were developed from a 20-question survey administered midsummer to 1,000 U.S. retirement savers, and a 19-question survey administered to 400 U.S. advisors.
Held-Away Account Services Benefit Advisors and Savers
The study’s findings emphasize the value of fiduciary advice in alleviating some of these challenges. Nineteen percent of all retirement decisions are shaped by advisors, more than any other professional source.
Moreover, 83% of savers working with an advisor reported feeling a strong sense of control over their investment decisions, underscoring the value of professional guidance. Notably, savers with an advisor were twice as likely as those without one to say they have more than $250,000 in retirement savings.
Despite this, many savers are not availing themselves of their advisors when it comes to held-away retirement or college savings. The survey showed that U.S. retirement savers are more likely to stick with an employer’s default setup than work with an advisor.
They do this even though savers who do work with an advisor are three times more likely to feel confident or in control than those who use default investment options.
“Held-away retirement accounts are the biggest pool of assets for most savers, yet individuals are often unable to receive advice on how to incorporate these accounts into their holistic financial plan,” Zurel said.
“It is vital that savers have access to an expert who can simplify complex investment options for them and help create a cohesive strategy for managing their savings accounts as part of their holistic financial plan.”
Offering these services is also beneficial to advisors. Ninety-one percent of advisors in the survey reported that offering held-away account services increased demand for their advisory services.
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